Southwest Airlines Co. (NYSE:LUV) was in 21 hedge funds' portfolio at the end of December. LUV investors should be aware of an increase in enthusiasm from smart money in recent months. There were 18 hedge funds in our database with LUV positions at the end of the previous quarter.
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Equally as integral, optimistic insider trading sentiment is another way to parse down the financial markets. As the old adage goes: there are plenty of reasons for an upper level exec to drop shares of his or her company, but only one, very obvious reason why they would behave bullishly. Various empirical studies have demonstrated the market-beating potential of this strategy if "monkeys" understand what to do (learn more here).
With these "truths" under our belt, let's take a glance at the key action surrounding Southwest Airlines Co. (NYSE:LUV).
In preparation for this year, a total of 21 of the hedge funds we track were bullish in this stock, a change of 17% from the third quarter. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, Edgar Wachenheim's Greenhaven Associates had the biggest position in Southwest Airlines Co. (NYSE:LUV), worth close to $38 million, accounting for 1.1% of its total 13F portfolio. Coming in second is Diamond Hill Capital, managed by Ric Dillon, which held a $24 million position; 0% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include Jim Simons's Renaissance Technologies, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and Cliff Asness's AQR Capital Management.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Bridgewater Associates, managed by Ray Dalio, established the biggest position in Southwest Airlines Co. (NYSE:LUV). Bridgewater Associates had 4 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also initiated a $3 million position during the quarter. The following funds were also among the new LUV investors: Andy Redleaf's Whitebox Advisors, Mike Vranos's Ellington, and Charles Davidson's Wexford Capital.
Bullish insider trading is at its handiest when the company in focus has seen transactions within the past half-year. Over the last six-month time period, Southwest Airlines Co. (NYSE:LUV) has experienced zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
With the results demonstrated by Insider Monkey's research, retail investors should always watch hedge fund and insider trading activity, and Southwest Airlines Co. (NYSE:LUV) is an important part of this process.
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