Southwest Airlines: Major Safety Net

Southwest Airlines reported mixed Q1 results as the coronavirus hit March revenues.
The airline now has access to over $13 billion of cash after raising an additional $3 billion of funds.
The company has reduced cash burn to ~$10 million.
The stock is a bargain at 7x normalized earnings, but the airline isn't the best deal in the sector.
Southwest Airlines (LUV) has seen a tepid rally following Q1 results as the company is poised to quickly wipe out the daily cash burn. The general airline industry was up over 10% on the quarterly news and bullish signs of reopening the economy and international travel with passenger tests. Unfortunately, this airline caused a self-inflicted wound by rushing out equity offerings when cash wasn't needed. Under $30, my investment thesis remains bullish on the stock while acknowledging that better upside exists in other sector stocks.
Read the full article on Seeking Alpha. 

Disclosure: Long AAL, UAL. Please review the disclaimer page for more details. 

Comments

Anonymous said…
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Anonymous said…
I... have nothing to add. I couldn't have said it better myself.
Anonymous said…
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Anonymous said…
**as he does on Twitter, maybe his opinion would be worth something.
Anonymous said…
Mark Holder: Major Fucking Idiot

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