Investors Buy Large Volume of Put Options on Southwest Airlines (LUV)

Southwest Airlines Company (NYSE:LUV) saw unusually large options trading on Friday. Investors purchased 8,746 put options on the company. This is an increase of 529% compared to the average volume of 1,391 put options.

In related news, Director William H. Dr Cunningham bought 4,500 shares of the business’s stock in a transaction dated Friday, August 11th. The shares were bought at an average cost of $54.00 per share, with a total value of $243,000.00. Following the completion of the transaction, the director now directly owns 66,969 shares of the company’s stock, valued at $3,616,326. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. 0.21% of the stock is owned by insiders.

A number of hedge funds have recently added to or reduced their stakes in the business. Pensionfund Sabic bought a new position in Southwest Airlines during the 3rd quarter worth about $1,511,000. Fulton Bank N.A. increased its holdings in Southwest Airlines by 23.1% during the 3rd quarter. Fulton Bank N.A. now owns 19,314 shares of the airline’s stock worth $1,081,000 after purchasing an additional 3,630 shares in the last quarter. Pensionfund DSM Netherlands bought a new position in Southwest Airlines during the 3rd quarter worth about $2,743,000. Eqis Capital Management Inc. increased its holdings in Southwest Airlines by 23.3% during the 3rd quarter. Eqis Capital Management Inc. now owns 18,287 shares of the airline’s stock worth $1,024,000 after purchasing an additional 3,455 shares in the last quarter. Finally, Curbstone Financial Management Corp increased its holdings in Southwest Airlines by 161.7% during the 3rd quarter. Curbstone Financial Management Corp now owns 15,260 shares of the airline’s stock worth $854,000 after purchasing an additional 9,430 shares in the last quarter. Hedge funds and other institutional investors own 79.42% of the company’s stock.

Southwest Airlines (NYSE LUV) opened at 58.01 on Wednesday. The stock has a market cap of $34.72 billion, a P/E ratio of 17.79 and a beta of 1.32. Southwest Airlines has a one year low of $36.91 and a one year high of $64.39. The stock’s 50 day moving average price is $54.35 and its 200-day moving average price is $57.06.

Southwest Airlines (NYSE:LUV) last released its earnings results on Thursday, July 27th. The airline reported $1.24 earnings per share (EPS) for the quarter, topping the Zacks’ consensus estimate of $1.20 by $0.04. The firm had revenue of $5.74 billion during the quarter, compared to analysts’ expectations of $5.73 billion. Southwest Airlines had a return on equity of 26.07% and a net margin of 9.63%. The company’s revenue was up 6.7% on a year-over-year basis. During the same quarter in the prior year, the company earned $1.19 EPS. On average, analysts predict that Southwest Airlines will post $3.64 earnings per share for the current year.

The company also recently announced a quarterly dividend, which was paid on Thursday, September 14th. Shareholders of record on Thursday, August 24th were issued a dividend of $0.125 per share. This represents a $0.50 dividend on an annualized basis and a yield of 0.86%. The ex-dividend date was Tuesday, August 22nd. Southwest Airlines’s dividend payout ratio (DPR) is presently 15.34%.

A number of equities research analysts have recently issued reports on the company. J P Morgan Chase & Co raised Southwest Airlines from a “neutral” rating to an “overweight” rating and boosted their target price for the stock from $60.00 to $66.00 in a research report on Friday, September 15th. Cowen and Company reiterated a “buy” rating and set a $67.00 price target on shares of Southwest Airlines in a report on Friday, September 1st. Citigroup Inc. reiterated a “buy” rating and set a $64.00 price target (down previously from $65.00) on shares of Southwest Airlines in a report on Thursday, September 7th. Argus upgraded Southwest Airlines from a “hold” rating to a “buy” rating and lifted their price target for the company from $61.76 to $68.00 in a report on Thursday, June 22nd. Finally, Zacks Investment Research upgraded Southwest Airlines from a “hold” rating to a “buy” rating and set a $70.00 price target on the stock in a report on Tuesday, July 4th. Two analysts have rated the stock with a sell rating, four have issued a hold rating and fourteen have issued a buy rating to the company’s stock. The company currently has a consensus rating of “Buy” and an average price target of $66.95.

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About Southwest Airlines

Southwest Airlines Co (Southwest) operates Southwest Airlines, a passenger airline that provides scheduled air transportation in the United States and near-international markets. The Company provides point-to-point service. The Company offers ancillary service offerings, such as Southwest’s EarlyBird Check-In and transportation of pets and unaccompanied minors, in accordance with Southwest’s respective policies.

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