Southwest Airlines has become a major player in the domestic market with the acquisition of AirTran seven years ago. It is a well managed company. With the market downturn yesterday one could just about buy anything in the next few days or weeks depending on the downturn. This would be my pick today.
Its price to earnings ratio is at 13 a solid place to be. Its profits on sales is at 13.4% and it earned 24.4% over the last ten years with only a 28.8% debt to capital ratio.
The price is in the middle of the buy zone which is $32 - $79. The price at close yesterday was $56.99. A bargain for a value investor.
This is what they say about themselves.
"Southwest Airlines Co. operates a passenger airline that provides scheduled air transportation services in the United States and near-international markets. As of December 31, 2016, the company operated a total of 723 Boeing 737 aircraft; and served 101 destinations in 40 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as 8 near-international countries, including Mexico, Jamaica, The Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, and Cuba. It also sells frequent flyer points and related services to business partners participating in the Rapid Rewards frequent flyer program, such as car rental agencies, hotels, restaurants, and retailers. In addition, the company operates Southwest.com, an Internet Website that enables customers to purchase and manage travel online; and Swabiz.com, a business travel reservation Web page. Southwest Airlines Co. was founded in 1967 and is headquartered in Dallas, Texas."
See investor website.
So we will buy 100 shares of LUV today.
PORTFOLIO TO DATE
100 DORMAN INCORPORATED COST $6,114 CURRENT VALUE $7,137
100 CORNING INCORPORATED COST $3,366 CURRENT VALUE $2,978
100 SOUTHWEST AIRLINES COST $5,699 CURRENT VALUE $5,699
100 SOUTHWEST AIRLINES COST $5,699 CURRENT VALUE $5,699
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