This airline beat analysts’ estimate by $0.05 last quarter, and three analysts have increased their earnings forecasts in the past 30 days. As well, legendary investor Warren Buffett, disclosed that he is buying airline stock, including Southwest’s.
Southwest Airlines (LUV)
From Heartland Adviser
Russ Kaplan Investments likes Alaska Airlines, Delta Airlines, and in this edition, we are recommending Southwest Airlines (LUV). Southwest specializes in low fares and short destinations. Southwest, serves 97 cities and is ever expanding the company’s destinations.
There is no question of Southwest’s soundness with a Value Line rating of “A”. Southwest has very little debt and a free cash flow of 2.65 billion, so there is a lot of opportunity for growth. At this time, the airline has 321 planes on order which, over time, should increase the company’s bottom line.
Southwest has a long-term point of view. The CEO, Gary Kelly, owns 505,000 shares, and four institutional funds own 31% of the company. Keep in mind, this stock does not pay a high dividend, so is not appropriate for those seeking income-type stocks.
Russ Kaplan, Heartland Adviser, www.russkaplaninvestments.com, 402-614-1321, November 4, 2016