5 Best Airline Stocks To Buy Today

3. Southwest Airlines Co. (NYSE:LUV)

Number of Hedge Fund Holders: 49

Southwest Airlines Co. (NYSE:LUV) operates a fleet of 736 Boeing 737 aircraft and it ranks third on the list of 10 best airline stocks to buy today.

Southwest Airlines Co. (NYSE:LUV) stock jumped 1.90% in premarket trading on October 4 after Barclays analyst Brandon Oglenski upgraded the airline stock to Overweight from Equal-Weight and raised his price target for the stock to $75 from $64.

The company’s revenue in the second quarter came in at $4 billion, an increase of 297.6% year over year, and it outperformed revenue estimates by $69.46 million, owing primarily to increases in leisure passenger traffic and fares. Southwest Airlines Co. (NYSE:LUV) had 736 Boeing 737 aircraft, including 68 MAX 8 aircraft at the end of the second quarter of 2021. The stock gained 38.3% in the past twelve months and 15.7%, year to date.

At the end of the second quarter of 2021, 49 hedge funds in the database of Insider Monkey held stakes worth $926 million in Southwest Airlines Co. (NYSE:LUV), down from 52 in the previous quarter worth $747 million.

In its Q1 2021 investor letter, ClearBridge Investments mentioned Southwest Airlines Co. (NYSE:LUV) and shared their insights on the company. Here is what the fund said:

“One of our goals as we constantly monitor the portfolio is to see if we can better deploy capital by lowering the probability of being wrong. This motivation drove our swap of Delta Airlines into Southwest Airlines during the quarter. We expect a huge rebound in airline traffic as COVID-19 concerns abate, but we are much more comfortable that it will be led by leisure travel. Conversely, we are more uncertain of the ultimate level and timing of business travel demand. Southwest, with its simple fare strategy and high leisure travel exposure, is better positioned to capture the ongoing traffic rebound without having to answer the business travel demand question on which Delta is more dependent. As a result, we expect Southwest to play serious offense as it gains share in the rebounding travel market and can fully leverage the massive pent-up demand for travel that we expect. In addition, the U.S. lead in vaccination over Europe favors Southwest over Delta, given the domestic focus of Southwest. COVID-19 has changed many things, but humans by their very nature like to move, and many of them will do it on Southwest.”