Southwest Airlines Co (LUV): Today's Featured Transportation Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Southwest Airlines ( LUV) pushed the Transportation industry lower today making it today's featured Transportation laggard. The industry as a whole closed the day up 1%. By the end of trading, Southwest Airlines fell 20 cents (-2.2%) to $8.95 on average volume. Throughout the day, 7.1 million shares of Southwest Airlines exchanged hands as compared to its average daily volume of nine million shares. The stock ranged in price between $8.95-$9.13 after having opened the day at $9.13 as compared to the previous trading day's close of $9.15. Other companies within the Transportation industry that declined today were: Newlead Holdings ( NEWL), down 6.3%, Frontline ( FRO), down 5.5%, DS Torm ( TRMD), down 4.1%, and US Airways Group ( LCC), down 3.2%.

Southwest Airlines Co. engages in the operation of a passenger airline that provides scheduled air transportation in the United States. Southwest Airlines has a market cap of $6.83 billion and is part of the services sector. The company has a P/E ratio of 20.9, above the average transportation industry P/E ratio of 20.4 and above the S&P 500 P/E ratio of 17.7. Shares are up 7.4% year to date as of the close of trading on Monday. Currently there are seven analysts that rate Southwest Airlines a buy, one analyst rates it a sell, and five rate it a hold.

TheStreet Ratings rates Southwest Airlines as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

On the positive front, Ultrapetrol Bahamas ( ULTR), up 23.7%, Vitran Corporation ( VTNC), up 11.4%, Navios Maritime Acquisition ( NNA), up 9%, and Excel Maritime Carriers ( EXM), up 8.3%, were all gainers within the transportation industry with CSX ( CSX) being today's featured transportation industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the transportation industry could consider iShares Dow Jones Transportation ( IYT) while those bearish on the transportation industry could consider ProShares UltraShort Industrials ( SIJ).

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