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 was unchanged today. By the end of trading, Southwest Airlines fell 12 cents (-1.1%) to $11.36 on heavy volume. Throughout the day, 13.6 million shares of Southwest Airlines exchanged hands as compared to its average daily volume of seven million shares. The stock ranged in price between $11.31-$11.59 after having opened the day at $11.57 as compared to the previous trading day's close of $11.48. Other companies within the Transportation industry that declined today were: Excel Maritime Carriers ( EXM), down 9.3%, Greenbrier Companies ( GBX), down 4.5%, Eagle Bulk Shipping ( EGLE), down 3.1%, and Frozen Food Express Industries ( FFEX), down 2.8%.
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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 $8.31 billion and is part of the services sector. The company has a P/E ratio of 17.5, below the S&P 500 P/E ratio of 17.7. Shares are up 10% year to date as of the close of trading on Tuesday. Currently there are eight 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 solid stock price performance, compelling growth in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows low profit margins.

On the positive front, Newlead Holdings ( NEWL), up 11.8%, FreeSeas ( FREE), up 9.5%, Globus Maritime ( GLBS), up 6.6%, and Marten Transport ( MRTN), up 5.8%, were all gainers within the transportation industry with Norfolk Southern Corporation ( NSC) 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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