12 Stocks on Jim Cramer’s Radar

2. Southwest Airlines Co. (NYSE:LUV)

Number of Hedge Fund Holdings: 40

Southwest Airlines Co. (NYSE:LUV)’s shares are up by 22.8% year-to-date. The gains have primarily come on the back of a 31.5% run since November 20th. Southwest Airlines Co. (NYSE:LUV) has been closely working with activist investor Elliott Management for more than a year. On December 8th, BMO Capital initiated coverage on the firm and set a $43 share price target along with a Market Perform rating. The firm outlined that Southwest Airlines Co. (NYSE:LUV) was experiencing inflation-driven margin pressures and suffering from a lack of premium options. However, BMO added that the airline did have a robust balance sheet. Southwest Airlines Co. (NYSE:LUV)’s balance sheet, as of September, included $28 billion in total assets, which included $3 billion in cash and $4.3 billion in long-term and current debt.

Cramer discussed Southwest Airlines Co. (NYSE:LUV)’s price movement and praised the firm’s execution. His comments came before Elliott Management announced in a regulatory filing that it had reduced its stake to. 9.9% which is below the level required to call a special shareholder meeting. The CNBC TV host praised Southwest Airlines Co. (NYSE:LUV)’s narrative building as well:

“Look I think they came on air and told a pretty good story. The changes that were made were very significant. It’s a good example of execution.”