Nearwater Capital Markets Ltd Invests $13.43 Million in Southwest Airlines Co. $LUV

Key Points

• Nearwater Capital Markets Ltd has acquired approximately $13.43 million in shares of Southwest Airlines Co., amounting to 400,000 shares or about 0.07% of the company's total stock.
• Southwest Airlines recently declared a quarterly dividend of $0.18 per share, translating to an annualized dividend yield of 2.3%, while the company currently has a dividend payout ratio of 109.09%.
• Recently, Southwest Airlines announced a share repurchase program authorizing up to $2 billion, indicating management's belief that the stock is undervalued.

Nearwater Capital Markets Ltd bought a new position in Southwest Airlines Co. (NYSE:LUV - Free Report) during the first quarter, according to the company in its most recent 13F filing with the SEC. The fund bought 400,000 shares of the airline's stock, valued at approximately $13,432,000. Nearwater Capital Markets Ltd owned about 0.07% of Southwest Airlines as of its most recent SEC filing.

Other hedge funds and other institutional investors have also recently modified their holdings of the company. Pandora Wealth Inc. purchased a new position in shares of Southwest Airlines in the 1st quarter worth approximately $34,000. Cheviot Value Management LLC purchased a new position in shares of Southwest Airlines in the 1st quarter worth approximately $42,000. Quent Capital LLC boosted its stake in shares of Southwest Airlines by 78.6% in the 1st quarter. Quent Capital LLC now owns 1,472 shares of the airline's stock worth $49,000 after buying an additional 648 shares during the last quarter. Brooklyn Investment Group boosted its stake in shares of Southwest Airlines by 122.3% in the 1st quarter. Brooklyn Investment Group now owns 1,787 shares of the airline's stock worth $60,000 after buying an additional 983 shares during the last quarter. Finally, MassMutual Private Wealth & Trust FSB boosted its stake in shares of Southwest Airlines by 22.1% in the 1st quarter. MassMutual Private Wealth & Trust FSB now owns 2,161 shares of the airline's stock worth $73,000 after buying an additional 391 shares during the last quarter. Hedge funds and other institutional investors own 80.82% of the company's stock.

Analyst Upgrades and Downgrades

A number of equities analysts have recently weighed in on LUV shares. Wall Street Zen downgraded Southwest Airlines from a "hold" rating to a "sell" rating in a research note on Saturday, July 26th. HSBC downgraded Southwest Airlines from a "hold" rating to a "reduce" rating in a research note on Thursday, July 24th. Barclays boosted their target price on Southwest Airlines from $26.00 to $34.00 and gave the stock an "equal weight" rating in a research note on Thursday, July 10th. Evercore ISI dropped their price objective on Southwest Airlines from $40.00 to $34.00 and set an "in-line" rating on the stock in a research note on Friday, July 25th. Finally, Susquehanna upped their price objective on Southwest Airlines from $25.00 to $30.00 and gave the company a "neutral" rating in a research note on Tuesday, August 5th. Four investment analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and six have assigned a Sell rating to the company. According to MarketBeat, the stock has an average rating of "Reduce" and an average target price of $33.06.

Insider Buying and Selling at Southwest Airlines

In related news, Director Gregg A. Saretsky bought 3,345 shares of the company's stock in a transaction on Wednesday, August 6th. The shares were purchased at an average price of $30.03 per share, for a total transaction of $100,450.35. Following the completion of the transaction, the director directly owned 23,644 shares in the company, valued at approximately $710,029.32. The trade was a 16.48% increase in their position. The transaction was disclosed in a filing with the SEC, which is accessible through this hyperlink. Also, Director Sarah Feinberg bought 1,500 shares of the company's stock in a transaction on Tuesday, August 5th. The shares were bought at an average price of $30.01 per share, for a total transaction of $45,015.00. Following the transaction, the director owned 14,229 shares of the company's stock, valued at approximately $427,012.29. This represents a 11.78% increase in their ownership of the stock. The disclosure for this purchase can be found here. Corporate insiders own 0.79% of the company's stock.

Southwest Airlines Stock Performance

Southwest Airlines stock traded up $0.24 during trading on Friday, hitting $31.36. The stock had a trading volume of 8,026,881 shares, compared to its average volume of 6,692,803. Southwest Airlines Co. has a 1 year low of $23.82 and a 1 year high of $37.96. The company has a quick ratio of 0.49, a current ratio of 0.56 and a debt-to-equity ratio of 0.51. The stock's 50 day moving average is $32.96 and its two-hundred day moving average is $31.32. The stock has a market cap of $16.47 billion, a price-to-earnings ratio of 47.52, a price-to-earnings-growth ratio of 0.81 and a beta of 1.19.

Southwest Airlines (NYSE:LUV - Get Free Report) last posted its earnings results on Wednesday, July 23rd. The airline reported $0.43 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.51 by ($0.08). The company had revenue of $7.24 billion for the quarter, compared to analysts' expectations of $7.30 billion. Southwest Airlines had a return on equity of 6.27% and a net margin of 1.43%.The company's revenue was down 2.1% on a year-over-year basis. During the same quarter in the prior year, the company earned $0.58 EPS. As a group, analysts predict that Southwest Airlines Co. will post 1.55 EPS for the current year.

Southwest Airlines Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Wednesday, September 24th. Shareholders of record on Wednesday, September 3rd will be given a dividend of $0.18 per share. The ex-dividend date is Wednesday, September 3rd. This represents a $0.72 annualized dividend and a dividend yield of 2.3%. Southwest Airlines's dividend payout ratio is currently 109.09%.

Southwest Airlines announced that its board has initiated a stock repurchase program on Wednesday, July 23rd that authorizes the company to buyback $2.00 billion in outstanding shares. This buyback authorization authorizes the airline to reacquire up to 9.4% of its stock through open market purchases. Stock buyback programs are typically an indication that the company's board of directors believes its stock is undervalued.

Southwest Airlines Company Profile

Southwest Airlines Co operates as a passenger airline company that provides scheduled air transportation services in the United States and near-international markets. As of December 31, 2023, the company operated a total fleet of 817 Boeing 737 aircraft; and served 121 destinations in 42 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as ten near-international countries, including Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos.