Gary Kelly, the Chairman of the Board at Southwest Airlines (LUV), recently bought 33,921 shares. The buy increased his stake by 4%, and came to a total cost of $1 million.
He was handily outdone by director Rakesh Gangwal, who bought 3,600,000 shares across a few transactions for a total cost of $106.7 million. These transactions mark the first insider buys at the airliner over the past two years. The last insider sale occurred in May 2023.
Overall, Southwest Airlines insiders own 0.4% of shares.
The airliner is up 13% over the past year, returning less than half the return of the overall S&P 500 index. Southwest has had a challenging year, with revenues up just 5% amid a 46% slowdown in earnings.
However, shares trade at a reasonable 17 times earnings, and the airliner should benefit from a busy holiday season, which could help the share price trend higher into next year.
Action to take: Investors may like Southwest shares here, as Southwest pays a 2.4% dividend at current prices in addition to shares being in an uptrend. Shares will likely trend higher until they hit resistance at their 52-week high near $35 per share.
For traders, the January 2025 $35 calls, last trading for about $1.15, could see high double-digit gains on a further uptrend in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.