I know a LOT of posters on this forum think many of us beat SWA up every chance we get..........(hey what fun is it if everything is rosey all the time and we don't stir the pot?), but in all seriousness, do you think it's time to buy some SWA stock? It's hovering around the $8.00 level and was in the mid $7's just yesterday. The company is well managed, hedged, run, and financially sound, so what do you think? Time to jump in or not? It's down 50% from its yearly high. And for those of you who don't know, I actually have a SIGNED PERSONAL letter from Herb Kelleher that he sent me when I bought my first 10 shares back in 1980. Unfortunately, I held them for five years, they did nothing and I sold them . BIG mistake, but hey, we've all been there, right? So, I know a LOT of posters would NEVER own airline stocks, but I have no problem with jumping in on a good company. Comments????

 

EWR,

I would say no. I sold all my luv and think God I did. If you want to buy and hold for a long time it would probably be a good buy, but I have made more on CAL, DAL stock, doing the day trade kind of stuff.

 

Hey ACE... do you think Nick Satan can get your boys up for the gators? I hope ya'll hang 50 on 'em... but if I were a bettin' man, I'd plunk it down on urbane meyer... yuck

GO VOLS... ROLL TIDE!!!

 

Hey now, everybody's overlookin' this little thing called the Iron Bowl... The only hope we Auburn boys have to somewhat salvage a pathetic season would be the number 7... yeah, right, I know.. Offense did show some signs of life against UGA though..

 

Fastest thread jack ever!!

 

Buy it!!! I think LUV will be back up to $15-17 sometime next year....buy it and hold it till you see that level....it'll get there!

 

Yeah, my bad on the thread jack...ahem... How's this:

NEW YORK, Nov 21 (Reuters) - Fitch Ratings on Friday downgraded ratings of Southwest Airlines (LUV.N: Quote, Profile, Research, Stock Buzz) on concerns about the company's high leverage after it drew down $400 million from a revolving credit facility. The agency cut Southwest's senior unsecured debt and issuer default rating by one notch to "BBB-plus," placing them three notches above speculative, or "junk" status. The move "reflects Fitch's view that continuing uncertainty in the U.S. airline operating environment and near-term credit market concerns have led LUV to raise leverage to a level that is no longer consistent with an "A" category credit profile," the agency said in a statement. Southwest's decision to draw down on its credit facility has raised balance sheet debt to about $3 billion from $2.1 billion at end 2007. "It appears unlikely that any significant debt reduction will occur in 2009," said Fitch. The cost of insuring Southwest debt against possible default rose sharply on Friday. Five-year credit default swaps were last trading at about 396 basis points, or $396,000 annually to insure $10 million of debt for five years, according to Markit Intraday, up about 24 percent from late Thursday. (Reporting by Ciara Linnane; Editing by Leslie Adler)

-I really don't know what any of this means. (I am an Auburn grad..) I still might buy it, kind of agree with captscott...

 

Okay, now's there's at least two of us in this boat!!! I'm getting a bit concerned since it seems NONE of the companies in the USA is worth investing in anymore......even Warren Buffet's Berkshire Hathaway has dropped over $70,000 a share in the past few weeks! What's going on? Aren't Americans concerned enough about THEIR country to invest in it any more? I've ridden the market ALL THE WAY DOWN ---- unfortunately I listened to all those "experts" telling me to just stay put --- while they sold off their stocks and screwed me....... I've taken about a 60% hit over the past few months, but I'm willing to invest in what I feel is a good company at an unbelievably low price. (I've done very well on CAL stock too though). I don't know, maybe it CAN go lower, but I certainly wouldn't think one of the financially strongest carriers in the world is worth so little........ Am I wrong about this?

 

With their fuel hedge not helping any more, and high labor costs, the run is over. At some point domestic growth will hault and will have to look for a partner. Southwest airlines 20 years from now will look back and say they had their time. Look out for the mega carriers for long term investment.

 

Here is a Reuters news report that just posted about an hour ago:

I have no real point in posting this article, except to point out a recent downgrade.

My thoughts on the subject of whether or not to buy LUV. The majority of LUV's stock is owned by institutional investors. So when individual investors pull their money out of the market, the fund/institutional managers have no choice but to sell. Hence, the dramatic decrease in "value" recently. It has been over ten years since LUV traded at these prices.

In my opinion, LUV's current valuation is based on these much larger market forces than on any particular change or specific flaw in their business model or execution of their short and long term business strategy. Fewer people may be flying the friendly skies in a recessionary economy, but when they do, they still will want the lowest price ticket they can find, very generally speaking. Oil is now trading right around $50. We could list hundreds of pro and con factors that effect their business model. At the end of the day, however, SWA is still SWA. If you LUV them, great! If you don't, that is fine as well.

Long term, at its current price ($8) LUV is a good buy, at $6 to $7 it is a great buy. It just depends though how tough your stomach is in the event the entire market continues to go down. Once individual investor money comes back into the market (whether that be in 5 hours, 5 days, 5 months or 5 years from now) my guess is that LUV will be right back between $14 and $16 a share. In fact LUV may be higher than that due to their historical ability to capitalize on competitor vulnerabilities when competing in tough market conditions.

Just my 2 cents.