Southwest Airlines Co. (LUV): What’s the Story?

Southwest Airlines Co. (LUV) is an interesting player in the Services space, with a focus on Regional Airlines. The stock has been active on the tape, currently trading at $58.29, down from yesterday’s close by -0.15%. Given the stock’s recent action, it seemed like a good time to take a closer look at the company’s recent data.

Fundamental Analysis

Does this stock stack up well when compared to its peers in the industry space? Let’s take a look. Southwest Airlines Co. (LUV) currently trades with a market capitalization of $35.01 Billion.

The balance sheet health of any company plays a key role in its ability to meet its obligations and maintain the faith of its investment base. For LUV, the company currently has $1.54 Billion of cash on the books, which is offset by $307 Million current liabilities. You can get a sense of how sustainable that is by a levered free cash flow of $1.73 Billion over the past twelve months. Generally speaking, earnings are expected to grow in coming quarters. Analysts are forecasting earnings of $0.88 on a per share basis this quarter. Perhaps, that suggests something about why 91.13% of the outstanding share supply is held by institutional investors.

Technical Analysis

It’s important to check the technicals to get a sense of how LUV has been acting. Looking at the stock’s movement on the chart, Southwest Airlines Co. recorded a 52-week high of $64.39. It is now trading 6.1% off that level. The stock is trading $54.38 its 50-day moving average by -3.91%. The stock carved out a 52-week low down at $36.91.

In recent action, Southwest Airlines Co. (LUV) has made a move of +11.65% over the past month, which has come on Strong relative transaction volume. Over the trailing year, the stock is underperforming the S&P 500 by 17.45, and it’s gotten there by action that has been more volatile on a day-to-day basis than most other stocks on the exchange. In terms of the mechanics underlying that movement, traders will want to note that the stock is trading on a float of 2.11% with $597.44 Million sitting short, betting on future declines. That suggests something of the likelihood of a short squeeze in shares of LUV.

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