It’s Time To Buy Southwest Airlines Stock And Wait (NYSE:LUV)

Blonde lady looking through the aeroplane window

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Introduction

After decades of successful execution, even during challenging environments like those post-9/11 and the Great Recession, the recent pandemic severely damaged Southwest Airlines’ (NYSE:LUV) business. The stock price is now down more than -60% off its highs

~Year ~Time Until Bottom ~Duration ~Depth
1973 4 months 6 months -50%
1974 6 months 18 months -60%
1978 4 months 8 months -37%
1981 4 months 15 months -49%
1984 6 months 18 months -46%
1985 2.5 years 6 years -59%
1994 1 year 4 years -60%
1999 6 months 18 months -38%
2001 8 years 14 years -78%
2018 5+ years ? -61% at this time

Year the Decline Began Purchase Date Sell Date Months Held Annualized Gains S&P 500 Annualized Gains Annualized Alpha to the S&P 500
1981 7/29/81 9/1/82 14 47.14% -7.24% 54.38%
1984 7/16/84 7/8/85 12 55.00% 26.60% 28.40%
1985 5/1/86 1/18/91 56 11.79% 8.85% 2.94%
1994 5/16/94 1/20/98 44 15.00% 32.78% -17.78%
1999 9/22/99 7/24/00 10 66.00% 14.08% 51.92%
2001 7/10/02 2/24/14 139 4.75% 8.69% -3.94%

Year the Decline Began Purchase Date Sell Date Months Held Annualized Gain S&P 500 Annualized Gain Annualized Alpha to S&P 500
1994 12/20/94 1/20/98 37 48.65% 37.00% 11.65%
2001 11/19/08 2/24/14 63 28.57% 25.69% 3.98%

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