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Southwest AirlinesLUVDON'T BUYJan 19, 2017Stock price when the opinion was issued
As of Jun 18, 2026. Market Open.
Sure, there's a travel boom, but the airlines haven't fully benefit due to major unreliability problems. For example, LUV cancelled 16,000 flights over the holidays last year due to bad weather and technical issues. Just last week, technical problems led to nationwide delays. Pity, because LUV has long held a good reputation, and he likes Southwest.
It's the best-run American Airlines with the best routes. It's been beaten up, so pick up shares. FDA full approval of Pfizer's Covid vaccine will help.
Several airlines qualify for the reopening play, but LUV boasts a CEO is smart to nail down new routes now. American Airlines is great, too, but not its balance sheet. LUV also benefits from the oil patch getting better.
He thinks you should be careful about valuing opportunities on whether Warren Buffet is buying them. He has historically hated airlines, but is giving his managers more room these days. LUV-N is expensive now in terms of fair market value and he does not see any upside. It will go on sentiment, rather than value.