5 Best Airline Stocks to Buy Now

1. Southwest Airlines Co. (NYSE: LUV)

Number of Hedge Fund Holders: 52

Southwest Airlines Co. (NYSE: LUV) is a passenger airline company that provides scheduled air transportation services in the US. In December 2020, the company had a fleet of 718 Boeing 737 aircraft and served 107 destinations in 40 states in the US alongside near-international countries. The company ranks 1st on our list of the best airline stocks to buy now.

On June 8th, Southwest Airlines Co. (NYSE: LUV) upped their order of Boeing MAX 7 jets by adding 34 more planes due to improvements in travel demands. The company also offered guidance saying that it expected sequential improvements in operating revenues for June due to more leisure passenger traffic and rising fares. In their first-quarter 2021 report, Southwest Airlines Co. (NYSE: LUV) reported an EPS of -$1.72 versus estimates of -$1.85 and revenue was $2.05 billion. The stock gained 20.5% in the past 6 months and 22.54% year to date.

By the end of the first quarter of 2021, 52 hedge funds out of the 866 tracked by Insider Monkey for the quarter held stakes in Southwest Airlines Co. (NYSE: LUV). The total value of their stakes was roughly $747 million. This is compared to 55 hedge funds holding stakes in the company worth about $757 million.

ClearBridge Investments, an investment management firm, mentioned Southwest Airlines Co. (NYSE: LUV) in its first-quarter 2021 investor letter. Here’s what they said:

“One of our goals as we constantly monitor the portfolio is to see if we can better deploy capital by lowering the probability of being wrong. This motivation drove our swap of Delta Airlines into Southwest Airlines during the quarter. We expect a huge rebound in airline traffic as COVID-19 concerns abate, but we are much more comfortable that it will be led by leisure travel. Conversely, we are more uncertain of the ultimate level and timing of business travel demand. Southwest, with its simple fare strategy and high leisure travel exposure, is better positioned to capture the ongoing traffic rebound without having to answer the business travel demand question on which Delta is more dependent. As a result, we expect Southwest to play serious offense as it gains share in the rebounding travel market and can fully leverage the massive pent-up demand for travel that we expect. In addition, the U.S. lead in vaccination over Europe favors Southwest over Delta, given the domestic focus of Southwest. COVID-19 has changed many things, but humans by their very nature like to move, and many of them will do it on Southwest.”

You can also take a peek at the Top 10 Aircraft Manufacturers in the World and 20 Best Airlines in the World in 2021.

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