LUV Stock Dropping?

[Kharma Police]

Why has SWA stock price fallen a little while the rest of the industry seems to be making substantial gains?

 

[N1atEcon]

Our hedges ran out last night at midnight...

 

[captain dad]

loss of confidence while the rest of the industry gets a small break from slowly falling fuel prices. It is to be expected.

 

[Andy Neill]

Why has SWA stock price fallen a little while the rest of the industry seems to be making substantial gains?

I don't understand your concern. LUV is trading within an ascending channel. What you are seeing is the normal ups and downs of a stock price. Compare today's price with what it will be in 2 1/2 weeks when it hits the top of the 5 week cycle.

LUV is up 15% from 5 weeks ago on its last dip. Up 20% from 10 weeks ago and up 25% from 15 weeks ago.

 

[i'mbatman]

loss of confidence while the rest of the industry gets a small break from slowly falling fuel prices. It is to be expected.

I wouldn't call over 300-500% gains in a month a small break. To answer the question, b/c southwest has such good hedges in place it was nowhere near as susceptible to high fuel price volatility as the LCC's, UAUA's, CAL's, etc. So as fuel went up, those airlines went exponentially lower. Now the reverse has/is happening. Never a good time to invest in airlines, but definately a good time to be trading them.

Who knows, maybe herb pulled some $ out of Southwest to make a quick gain with USairways!

 

[lowecur]

As the price of oil continues to drop, the reality that hedging profits will not be enough to offset an on-going operational deficit is coming back to roost. Gary has been reluctant to ask for givebacks from employees as long as hedges continue to subsidize the airlines revenue. The employees for their part will ride this gravy train until it's absolutely necessary to do something. That will be 3 or 4 years down the line at the earliest.

The price drop in oil will certainly help some of the legacy's, but I believe AMR, and UAL will continue to struggle. I think you could see WN stepping up the pressure on these two at key hubs. In addition to their already strong presence at DIA, it wouldn't surprise me to see WN step into both D/FW and ORD at some point in the next few years. Both of those moves could severely cripple both of these legacy's where they would need international carrier intervention to survive. There was an article I was reading where D/FW is losing revenue hand over fist because of AMR cutbacks. They said if it wasn't for a deal to drill for natural gas at the airport ($160M), they would be in deep trouble.

imp: ​

 

[FlyinGuy]

Blah...Blah...Blah...look for the order!!!!

 

[waitin]

"Our hedges ran out last night at midnight..." by N1 and
"Blah...Blah...Blah...look for the order!!!!" by FG


Now those two right there are funny...

 

[1080P]

Who cares buy it now

 

[Tanker Clown]

Who cares buy it now

If you really think this, then a fool and his money are about to part ways.

There is no such thing as a good airline stock. SWA is by far the best 121 carrier...but even guys with options don't have good things to say about the stock.

 

[fiel12]

Wow!! I'm sold!!

Can anyone give me the app. info to any legacy carrier. Ummm, I mean if they are hiring.

 

[N1atEcon]

ha ha ha ORD and DFW..... Sniff, wipe, sniff! Lowecur where do you get this stuff?

 

[lowecur]

ha ha ha ORD and DFW..... Sniff, wipe, sniff! Lowecur where do you get this stuff?

ho ho ho DIA, IAD, SFO, and PHL.

imp:​

 

[N1atEcon]

The difference is that we already serve the Dallas and Chicago market. So keep trying but you need better logic than just spouting off DEN PHL SFO ect.

 

[Andy Neill]

Now LUV is up today and DAL, AMR, CAL, AAI, NWA are all down. Significant?............No - just normal ebb and flow as I said before.

 

[Captzaahlie]

Our hedges ran out last night at midnight...

You got a laugh outta me on that one.....:laugh:

 

[lowecur]

The difference is that we already serve the Dallas and Chicago market. So keep trying but you need better logic than just spouting off DEN PHL SFO ect.

You also serve 3 other airports around LAX, one around SFO, and one around BWI. Now does that make sense?

DIA, SFO, IAD, and PHL were all entered into to put a hurt'n on a specific carrier. My point is that LUV's strategy on entering into a new market changed when Gary decided to head into Philly. With the 737, he had connected all the dots he could. His next strategic step was to head into PHL, to hurry along US into BK (did not work). Next he went into DIA and IAD to put a hurt'n on both UAL and FRNT (it's working but both carriers have bought themselves some more time). SFO was a block to both VX and B6. More VX, as they want them gone.

D/FW and ORD would be just more moves on the chessboard to hurry along carriers that are walking on one leg. Will they do it? Who knows, but it wouldn't surprise me.

imp:​

 

[Captzaahlie]

Not that I very often agree with Lowcures line of thought what he says in this case makes a lot of sense....
SWA is filling in the gaps and taking as much as the other airlines give up. There is very little doubt about that. I think you'll see them do it at an even faster rate here in the future.

 

[Beetle007]

How much has the value of Southwest's fuel hedges dropped in the past 2 weeks? I imagine their short term investment capital has dropped significantly.

Thats the darned thing about fuel hedges. You make money when fuel is on its way up. And you lose money when fuel is on its way down (or flat for that matter).

 

[Old School]

LUV is unchanged today while the XAL index is down 8%. I don't put much weight into day to day prices. Look at the bigger trends and look at projected earnings per share. LUV trades at 17 times annual earnings per share.