Originally Posted by
aerospacepilot
I thought that in the beginning of 2003 (5 years ago) when the stock market was at the very bottom from the last recession. I was wrong! Currently Southwest's stock is slightly lower than it was at the beginning of 2003. Boeing, however, was at $32 a share and is now at about $90. Southwest has just kind of stood there.
I personally would not tie my money up in Southwest stock. I think they are a good company that will continue to be successful, but for some reason, that does not always translate into rising stock prices. (Southwest has made well over 1 BILLION dollars since 2003, has been the most successful airline, and future prospects look good, yet their stock is still flat)
That's because the market is flooded with LUV common shares; about 750 million. The closest sized airline AMR has about one third that amount: 250 million. UAL and CAL have even less at about 100 million each. Stocks move on volume as much as earnings. So all those earnings LUV are reporting are being divided among 3-6 times the number of shareholders than their competitors, which keeps the price low.
On the other hand, SWA has announced a stock buy back plan which should help the situation.