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Airline Stock #5 – Southwest Airlines (LUV)
It’s really hard to put fun-loving Southwest Airlines (LUV) on this list, but doing so is a must
if investors are to protect their portfolios. LUV is the clear leader in the discount space, and the one carrier that has been able to consistently deliver
profits. But now chinks in the armor are appearing on the heels of a deep recession that is reducing demand in key markets.Not even Southwest is immune to economic weakness, nor are they immune to the impact of a flu pandemic that will essentially ground planes for days
or weeks should the swine flu truly reach 40% of the population.The company posted a profit of $58 million in the second quarter but said that it could not guarantee a profit for the third quarter. The rating
agencies immediately downgraded Southwest debt as a result. It should be noted that rival JetBlue (JBLU)
had no problem with guiding towards a profit for the second half of the year. Swine flu could not be coming at a worse time for airlines already weak from
a long recession.There is still love for LUV. Use that affinity as an exit opportunity.
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