Helping Self-Directed Investors Succeed Blog - Will Investors Love This Airline Stock?

Will Investors Love This Airline Stock as of August 10th, 2018?

August 10th, 2018

US Equities started the week very well but Friday turned out to be a day of reckoning for bulls. Economic news from Turkey did create some nervousness for investors who are already grappling with the uncertainties of the Trade Tariff related dynamics. Despite these headwinds, the S&P 500 Tracking ETF - SPY is still up 6.11% for the year. The The Nasdaq 100 Tracking ETF - QQQ continues to lead by a wide margin - up 15.9% and the Dow 30 Tracking ETF - DIA a clear laggard which is up 2.39% for the year.

The continuing weakness in crude oil prices made us focus on one attractive airline stock - Southwest Airlines, Inc. (LUV) - this week which appears to be poised for a breakout from a long consolidation.

Southwest is reputed for its management and operational efficiencies and this has helped it ride over many a crises the airline industry faced over these years. This is a fundamentally strong stock which started correcting in early January this year from a high of $66.17. It appeared to have a hit bottom at about $50 in late June and is one the ascent for the past few months. The company is expected to announce respectable 3rd quarter earnings in late October. It must be noted Q2 was not a blowout quarter for the company as earnings rose just about 1.6%.

If oil prices continue to remain or trend lower, this airline could be a big beneficiary and that'll be the biggest risk factor to be aware of.

Self-directed investors will want to perform more research on this stock to see how appropriate this is for their own portfolios.

Good Luck and Happy Investing!

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