Southwest Airlines Co. ($LUV) Target: $8 Confident Investor Rating: Poor

Company name Southwest Airlines Co.
Stock ticker LUV
Live stock price [stckqut]LUV[/stckqut]
P/E compared to competitors Good
MANAGEMENT EXECUTION
Employee productivity Poor
Sales growth Poor
EPS growth Poor
P/E growth Poor
EBIT growth Poor
ANALYSIS
Confident Investor Rating Poor
Target stock price (TWCA growth scenario) $7.15
Target stock price (averages with growth) $8.25
Target stock price (averages with no growth) $8.38
Target stock price (manual assumptions) $8.72

Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in this stock. Not only are nearly all of the metrics bad for this company, but their decision to purchase another airline violates my principle of investing in companies that make a major acquisition or divestiture. Major acquisitions can be good in the long term but too often in the short term the process diverts the attention of executive management. This is likely to be the case for Southwest as they have not made that many acquisitions in the past. I don’t say this too much on this site but I suggest that you sell this stock if you currently own it.

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