Summer Stocks to Buy: Southwest Airlines (LUV)
Speaking of travel, I am not fond of airline stocks, but if there is one airline stock I was forced to own, it would be Southwest Airlines (LUV). LUV stock’s business model simply does not break down, regardless of the economic environment. The stock eclipsed its all-time high in February of this year, but just 18 months ago, LUV stock was trading for a little less than $10.
Southwest remains profitable where all other airlines have gone bankrupt or been forced to merge. It is difficult to see multiple years of growth in the airline industry, but Southwest is experiencing year-over-year growth in EPS, and somehow has more cash than debt.
People will be flying this summer, and fares don’t seem to be slowing down. Done correctly, travel can be a value proposition even for the budget consumer, and Southwest benefits from the budget traveler. That makes LUV a great summer stock.