Southwest Airlines Co. (LUV): Keep paying attention to its insider activity

Southwest Airlines Co. (NYSE:LUV) saw an upside of 5.68% to close Friday at $54.35 after adding $2.92 on the day. The 5-day average trading volume is 7,817,360 shares of the company’s common stock. It has gained $54.71 in the past week and touched a new high 2 times within the past 5 days. An average of 6,999,435 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 6,787,056.

LUV’s 1-month performance is 9.69% or $4.80 on its low of $47.34 reached on 09/15/21. The company’s shares have touched a 52-week low of $36.05 and high of $64.75, with the stock’s rally to the 52-week high happening on 04/14/21. YTD, LUV has achieved 16.61% or $7.74 and has reached a new high 20 times. However, the current price is down -16.06%% from the 52-week high price.


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Insider Transactions

On Mar 15, 203 days have gone by since the last insider trading activity for Southwest Airlines Co. (LUV). MONTFORD JOHN T (Director) most recently sold 500 shares at $61.85 per share on Mar 15. This transaction cost the insider $30,925. EVP Corporate Services, Jordan Robert E, sold 28,795 shares at a price of $59.98 on Mar 08. Then, on Feb 25, EVP, Daily Operations Wells Gregory D sold 15,909 shares at a price of $57.46 per share. This transaction amounted to $914,131.

Valuation Metrics

Southwest Airlines Co. (LUV) has a trailing price-to-earnings (P/E) ratio of 17.21 for the broader industry and 28.42 for the sector, meaning that investors are optimistic about the stock’s future prospects. The company’s PE ratio for the last five years has touched a high of 105.25 and a low of 7.021. LUV stock has a beta of 1.20. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 3.08 while the price-to-book (PB) in the most recent quarter is 3.32, with the price to cash flow ratio at 47.99.

Southwest Airlines Co.’s quick ratio for the period ended June 29 was 1.50, with the current ratio over the same period at 1.50 meaning that LUV stock is able to fulfill its debt obligations. As well, the company’s long term debt to equity for the quarter ending June 29 was 0.95, while the total debt to equity was 1.17. In terms of profitability, the gross margin trailing 12 months is 66.20%The trailing 12-month EBITDA margin is -38.22% while for the period ending June 29; Southwest Airlines Co.’s operating margin was -18.10%. The firm’s gross profit as reported stood at -$635.0 million against revenue of $9.05 billion.

Earnings Surprise

For the quarterly period ending June 29 this year, Southwest Airlines Co.’s cash and short-term investments amounted to $2.75 billion against total debt of $13.3 billion. Net income and sales went up compared to those figures reported in the previous quarter. Analysts expected LUV to announce -$0.23 per share in earnings in its latest quarter, but it posted -$0.35, representing a -52.20% surprise. EBITDA for the quarter stood at more than $909.0 million. LUV stock balance sheet for the quarter ending June 29 shows that total liabilities totaled 28.52 billion, with total debt at $13.3 billion. Shareholders hold equity totaling $591.64 million

Technical Picture

Let’s look briefly at Southwest Airlines Co. (LUV) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 01 October was 70.62% to suggest the stock is trending Overbought, with historical volatility in this time period at 35.70%.

The stock’s 5-day moving average is $52.87, reflecting a +2.84% or $1.50 change from its current price. LUV is currently trading +9.58% above its 20-day SMA, -9.08% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 and SMA200 by +5.97% and +17.08% respectively.

Stochastic %K and %D was 75.59% and 74.85% and the average true range (ATR) pointed at 1.63. The RSI (14) points at 65.51%, while the 14-day stochastic is at 95.12% with the period’s ATR at 1.56. The stock’s 9-day MACD Oscillator is pointing at 0.63 and 1.80 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Southwest Airlines Co. (NYSE: LUV), JP Morgan upgraded it to an Overweight rating. They previously had a Neutral rating on the stock. Analysts offering their rating for LUV stock have a consensus rating for the stock as Buy. Currently, 0 brokerage advisors rate LUV as a “sell,”, while 2 advise that investors “Hold.” 0 analysts have rated the stock as underweight. 3 rates the stock as overweight while 17 have offered a “buy” rating.

What is LUV’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $55.00 and a high of $76.00, with their median price target at $65.00. Looking at these predictions, the average price target given by analysts is for Southwest Airlines Co. (LUV) stock is $66.00.

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