5 Best Airline Stocks To Invest In Right Now

1. Southwest Airlines Co. (NYSE: LUV)

Number of Hedge Fund Holders: 52

Southwest Airlines Co. (NYSE: LUV) is ranked first on our list of 12 best airline stocks to invest in right now. The company is based in Texas and markets passenger airline services. It has a fleet of 718 aircraft that travel to 107 destinations around the world. The firm posted earnings for the second quarter on July 22, reporting a revenue of over $4 billion, up 297% compared to the revenue over the same period last year and beating market predictions by $70 million. The company has a market cap of over $30 billion. 

On July 26, investment advisory Jefferies maintained a Buy rating on Southwest Airlines Co. (NYSE: LUV) stock but lowered the price target to $65 from $75, noting the lower 2023 cash flow forecast for the firm. On August 11, Redburn started covering LUV stock with a Buy rating.

At the end of the fourth quarter of 2020, 52 hedge funds in the database of Insider Monkey held stakes worth $747 million in Southwest Airlines Co. (NYSE: LUV), down from 55 in the preceding quarter worth $757 million.

In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Southwest Airlines Co. (NYSE: LUV) was one of them. Here is what the fund 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.”

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