Traders Purchase Large Volume of Southwest Airlines Put Options (NYSE:LUV)

Key Points

• On Tuesday, traders purchased 33,801 put options for Southwest Airlines Co. (NYSE:LUV), marking a 39% increase from the average daily volume.
• Directors of Southwest Airlines have made recent stock purchases, with Sarah Feinberg acquiring 1,500 shares and Gregg A. Saretsky purchasing 3,345 shares, reflecting increases in their ownership positions.
• Several institutional investors increased their stakes in Southwest Airlines, with 80.82% of the stock currently owned by these investors, indicating ongoing confidence in the airline's performance.

Southwest Airlines Co. (NYSE:LUV - Get Free Report) was the target of unusually large options trading activity on Tuesday. Traders acquired 33,801 put options on the stock. This is an increase of 39% compared to the average daily volume of 24,401 put options.

Insider Buying and Selling at Southwest Airlines

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

Institutional Inflows and Outflows

Several institutional investors have recently added to or reduced their stakes in the business. Ameriflex Group Inc. raised its position in Southwest Airlines by 7.1% in the second quarter. Ameriflex Group Inc. now owns 4,690 shares of the airline's stock worth $148,000 after acquiring an additional 310 shares during the period. Benjamin Edwards Inc. raised its position in shares of Southwest Airlines by 1.4% during the 2nd quarter. Benjamin Edwards Inc. now owns 24,857 shares of the airline's stock valued at $806,000 after purchasing an additional 333 shares during the period. Copperwynd Financial LLC raised its position in shares of Southwest Airlines by 2.1% during the 1st quarter. Copperwynd Financial LLC now owns 16,301 shares of the airline's stock valued at $547,000 after purchasing an additional 337 shares during the period. GAMMA Investing LLC raised its position in shares of Southwest Airlines by 2.4% during the 3rd quarter. GAMMA Investing LLC now owns 14,285 shares of the airline's stock valued at $456,000 after purchasing an additional 341 shares during the period. Finally, PNC Financial Services Group Inc. raised its position in shares of Southwest Airlines by 0.5% during the 1st quarter. PNC Financial Services Group Inc. now owns 76,719 shares of the airline's stock valued at $2,576,000 after purchasing an additional 345 shares during the period. 80.82% of the stock is currently owned by institutional investors.

Analyst Upgrades and Downgrades

Several equities analysts have recently commented on the stock. Evercore ISI upped their price objective on shares of Southwest Airlines from $34.00 to $35.00 and gave the company an "in-line" rating in a research note on Monday, September 29th. JPMorgan Chase & Co. upped their price objective on shares of Southwest Airlines from $28.00 to $35.00 and gave the company an "overweight" rating in a research note on Friday, September 12th. UBS Group upped their price objective on shares of Southwest Airlines from $27.00 to $34.00 and gave the company a "neutral" rating in a research note on Monday, July 7th. Barclays upped their price objective on shares of Southwest Airlines from $26.00 to $34.00 and gave the company an "equal weight" rating in a research note on Thursday, July 10th. Finally, Susquehanna upped their price objective on shares of Southwest Airlines from $30.00 to $35.00 and gave the company a "neutral" rating in a research note on Friday, October 3rd. Five equities research analysts have rated the stock with a Buy rating, ten have assigned a Hold rating and four have issued a Sell rating to the company's stock. Based on data from MarketBeat, the stock presently has an average rating of "Hold" and a consensus price target of $33.38.

Southwest Airlines Trading Up 0.8%

Shares of NYSE LUV traded up $0.26 during midday trading on Tuesday, hitting $34.69. 9,404,274 shares of the company traded hands, compared to its average volume of 8,699,834. Southwest Airlines has a 12-month low of $23.82 and a 12-month high of $37.96. The company has a debt-to-equity ratio of 0.51, a quick ratio of 0.49 and a current ratio of 0.56. The stock has a 50-day moving average price of $32.28 and a 200 day moving average price of $31.55. The firm has a market cap of $18.22 billion, a P/E ratio of 52.56, a P/E/G ratio of 0.89 and a beta of 1.21.

Southwest Airlines (NYSE:LUV - Get Free Report) last announced its quarterly earnings results on Tuesday, February 6th. The airline reported ($0.38) earnings per share (EPS) for the quarter. The company had revenue of $6.17 billion for the quarter. Southwest Airlines had a net margin of 1.43% and a return on equity of 6.27%. As a group, analysts expect that Southwest Airlines will post 1.55 earnings per share for the current year.

Southwest Airlines declared that its board has authorized a stock buyback program on Wednesday, July 23rd that allows the company to repurchase $2.00 billion in outstanding shares. This repurchase authorization allows the airline to purchase up to 9.4% of its stock through open market purchases. Stock repurchase programs are usually a sign that the company's management believes its shares are undervalued.

Southwest Airlines Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Wednesday, September 24th. Shareholders of record on Wednesday, September 3rd were given a $0.18 dividend. The ex-dividend date was Wednesday, September 3rd. This represents a $0.72 annualized dividend and a yield of 2.1%. Southwest Airlines's dividend payout ratio (DPR) is presently 109.09%.

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.

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