"...Now with LUV - I have traded the company about three times last year, and managed to gain a total of 30% on the year (about 10% each quarter for the last three). The chart you sent me basically tells me that LUV seems to be fairly cheap at the moment. (I would likely sell JBLU)
I am NOT a day trader. LUV is on my list because it is the only airline that consistently over the years managed to successfully grow and make money. They have found a pattern for success in a tough market. People use/will use Southwest as they used to travel in Greyhound buses.
LUV's good business in my mind that makes for a good insurance to cover a potential downside risk. I would not mind holding luv long term in case the entire airline sector goes sour, as it did after Sept.11. Right now LUV is attractively priced because they basically cost the same as right before Sept. 11. (chart: http://finance.yahoo.com/q/bc?s=LUV&t=my&l=on&z=m&q=l&c=)
The current price has not taken into account that 6 years of profit and growth have passed for Southwest. Low Cost airline efforts of the legacy carries (like song) have failed, the low cost competition (even though growing) is loosing ground against luv. The market's total seat capacity has contracted about 5% in the last year alone, while southwest grew capacity close to 10%.
% (targets: $17.6 or $18.4) in the next three months, and possibly up to 20% ($19.20) in the next 6 months.
Like taking candy from a baby. That is good enough for a position in my portfolio...."
$15.85 (12/19/06)
Agree
Disagree
