Paul Singer’s Latest Portfolio: Top 10 Stock Picks

2. Southwest Airlines Co. (NYSE:LUV)

Elliott Management’s Equity Stake: $2.01 Billion

Number of Hedge Funds Holding Stakes: 34

Southwest Airlines Co. (NYSE:LUV) is a passenger airline company that provides scheduled air transportation services. It boasts one of the largest fleets, comprising 803 Boeing 737 aircraft serving over 100 destinations. Elliott Management first confirmed a $1.9 billion stake in the airline in 2024, kickstarting an activist campaign.

The activist campaign came as the company had suffered significant margin deterioration, with its stock underperforming significantly. Elliott Management sought to oust CEO Bob Jordan and chairman Gary Kelly and replace half of the board, insisting the management had failed to pursue aggressive price changes to boost revenue.

Following a push and pull, the Paul Singer hedge fund struck a deal with the company to avert a proxy fight in exchange for six director positions late last year. The changes come on Southwest Airlines Co. (NYSE:LUV) slashing unprofitable routes to cut costs. It has also started to offer free checking of bags only to the upper tiers of its frequent-flier program, those who purchased business-class tickets. It also initiated new revenue initiatives aimed at boosting earnings by $4 billion by 2027. Southwest Airlines also announced a $2.5 billion buyback program to return value to shareholders.