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2Q15 Institutional Investor Activity in Southwest Airlines

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2Q15 Institutional Investor Activity in Southwest Airlines PART 1 OF 6

Southwest Airlines: Institutional Investors Shied Away in 2Q15

2Q15 institutional investor activity in airlines

In this series, we’ll cover how institutional investors have played airlines in 2Q15, with a specific focus on Southwest Airlines (LUV). Aggregate institutional investor filings from 2Q15 revealed that the vast majorty of asset managers weren’t bearish on airlines such as Southwest Airlines (LUV), Delta Air Lines (DAL), Alaska Air Group (ALK), JetBlue Airways (JBLU), Allegiant Travel (ALGT), SkyWest (SKYW), and United Continental Holdings (UAL). Airline stocks that are publicly traded in the United States have had a rough year so far in 2015, having collectively lost 7.43% to date.

Southwest Airlines: Institutional Investors Shied Away in 2Q15

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Airline companies that have witnessed double-digit falls in share prices include Spirit Airlines (SAVE), American Airlines Group (AAL), Virgin America (VA), Republic Airways Holdings (RJET), and United Continental Holdings (UAL). The above graph captures the last one-year performance of US airline companies.

Southwest Airlines saw additions or new positions to the portfolios of 331 institutional investors in 2Q15 against position decreases or liquidations from 357 asset management companies. Overall shares held by institutional investors in DAL fell by ~10 million shares during the last quarter to 509 million shares.

Sector performance

Airline companies fall under the transportation sector, which includes other industries such as railroads, trucking, shipping, and courier service providers. The sector as a whole has been affected by weakening volumes across sub-industries and macro headwinds.

The Dow Jones Transportation Average has fallen 10.41% year-to-date compared to the SPDR S&P 500 ETF (SPY), which lost 5.11% in value over the same period. The iShares Transportation Average ETF (IYT) tries to replicate the performance of the Dow Jones Transportation Average Index. It has a portfolio weighting of 16.5% for airlines.

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