Early Morning Activity Shows Southwest Airlines (LUV) Down

Trade-Ideas LLC identified Southwest Airlines (LUV) as a pre-market laggard candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Southwest Airlines

(

LUV

) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Southwest Airlines as such a stock due to the following factors:

  • LUV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $237.5 million.
  • LUV traded 48,222 shares today in the pre-market hours as of 8:24 AM.
  • LUV is down 5.7% today from yesterday's close.

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More details on LUV:

Southwest Airlines Co. operates passenger airlines that provide scheduled air transportation services in the United States and near-international markets. As of December 31, 2015, it operated 704 Boeing 737 aircraft. The stock currently has a dividend yield of 0.9%. LUV has a PE ratio of 13. Currently there are 8 analysts that rate Southwest Airlines a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Southwest Airlines has been 6.5 million shares per day over the past 30 days. Southwest Airlines has a market cap of $27.6 billion and is part of the services sector and transportation industry. The stock has a beta of 1.25 and a short float of 2.7% with 1.74 days to cover. Shares are down 0.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Southwest Airlines as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, increase in net income, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 5.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SOUTHWEST AIRLINES has improved earnings per share by 19.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SOUTHWEST AIRLINES increased its bottom line by earning $3.26 versus $1.65 in the prior year. This year, the market expects an improvement in earnings ($4.00 versus $3.26).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Airlines industry average. The net income increased by 12.8% when compared to the same quarter one year prior, going from $453.00 million to $511.00 million.
  • 35.24% is the gross profit margin for SOUTHWEST AIRLINES which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.97% is above that of the industry average.
  • Net operating cash flow has increased to $1,616.00 million or 11.29% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -33.00%.

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