10 Most Undervalued Stocks to Buy and Hold for 5 Years

7. Southwest Airlines Co (NYSE:LUV)

Forward P/E Ratio as of January 30: 17.76

Number of Hedge Fund Holders: 40

Southwest Airlines Co (NYSE:LUV) is one of the most undervalued stocks to buy and hold for 5 years. On January 29, Southwest Airlines Co (NYSE:LUV) reported an EPS of $0.58 for the fourth quarter of 2025, slightly above its $0.57 guidance for the period, as well as $7.4 billion in revenues, slightly missing its $7.5 billion target. Looking ahead, Southwest Airlines Co (NYSE:LUV) is bullish on 2026, projecting significantly higher earnings, with full-year adjusted EPS guidance of at least $4, which is well above its 2025 adjusted EPS of $0.93.

During its earnings call, Southwest Airlines Co (NYSE:LUV) also announced it expects 66 Boeing 737-8 deliveries and the retirement of 60 aircraft in 2026. Full-year net capital spending is expected to be between $3 billion and $3.5 billion. Southwest Airlines Co (NYSE:LUV) ended the quarter with $3.2 billion in cash and a gross leverage ratio of 2.4 times, both within the company’s targets. The company also reported that it repurchased $2.6 billion in shares and paid $399 million in dividends.

Southwest Airlines Co (NYSE:LUV) is a passenger airline that provides scheduled air transportation services in the United States and nearby international markets, along with in-flight entertainment, connectivity, and websites and apps for booking flights.