Pick Southwest Stock For Long-Term Gains
- Date: 16-Oct-2020
- Source: Forbes
- Sector:Financial Markets
- Country:Middle East
Pick Southwest Stock For Long-Term Gains
SALT LAKE CITY, UT - SEPTEMBER 28, 2014: The Southwest Airlines logo on the wall behind the ... [+] ticketing agents at Salt Lake City International Airport in Utah. (Photo by Robert Alexander/Getty Images)
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We believe that there is a hidden opportunity in Southwest Airlines' stock (NYSE: LUV), which has lost 30% of its value since the beginning of the year and currently trades near $40. Until June, Southwest generated $520 million of operating cash, supported by $784 million of PSP grant proceeds (payroll support program). Considering the $16 million/day cash burn rate, the company is likely to observe operating cash outflow of $2 billion for the full year, net of PSP proceeds for the third quarter. Therefore, the staggering $8 billion
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