Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. Trade-Ideas LLC identified Southwest Airlines ( LUV) as a post-market leader 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 $201.7 million.
- LUV is up 4.7% today from today's close.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in LUV with the Ticky from Trade-Ideas. See the FREE profile for LUV NOW at Trade-Ideas More details on LUV: Southwest Airlines Co. operates passenger airlines that provide scheduled air transportation services in the United States. As of December 31, 2012, the company operated 694 aircraft, including 606 Boeing 737 aircraft and 88 Boeing 717 aircraft. The stock currently has a dividend yield of 0.8%. LUV has a PE ratio of 24.6. Currently there are 8 analysts that rate Southwest Airlines a buy, 2 analysts rate it a sell, and 2 rate it a hold. The average volume for Southwest Airlines has been 7.2 million shares per day over the past 30 days. Southwest Airlines has a market cap of $14.7 billion and is part of the services sector and transportation industry. The stock has a beta of 0.87 and a short float of 2% with 1.38 days to cover. Shares are up 13.9% year-to-date as of the close of trading on Thursday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. 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 impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow. Highlights from the ratings report include:
- SOUTHWEST AIRLINES reported significant earnings per share improvement 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 year. We feel that this trend should continue. During the past fiscal year, SOUTHWEST AIRLINES increased its bottom line by earning $0.56 versus $0.24 in the prior year. This year, the market expects an improvement in earnings ($1.06 versus $0.56).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Airlines industry. The net income increased by 1518.8% when compared to the same quarter one year prior, rising from $16.00 million to $259.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 15.1%. Since the same quarter one year prior, revenues slightly increased by 5.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that LUV's debt-to-equity ratio is low, the quick ratio, which is currently 0.68, displays a potential problem in covering short-term cash needs.
- Powered by its strong earnings growth of 1750.00% and other important driving factors, this stock has surged by 88.72% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full Southwest Airlines Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.