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'Trading Nation' Traders Weigh In On Southwest Airlines

Craig Jones
·1 min read

Todd Gordon of TradingAnalysis.com and Mark Tepper of Strategic Wealth Partners spoke on CNBC's "Trading Nation" about Jefferies' bullish call on Southwest Airlines Co (NYSE: LUV).

Jefferies initiated Southwest Airlines with a Buy rating, Delta Air Lines, Inc. (NYSE: DAL) and United Airlines Holdings Inc (NASDAQ: UAL) with a Hold rating and American Airlines Group Inc (NASDAQ: AAL) with a Sell rating.

Tepper thinks it's still too early to buy the airline stocks and he would wait a little bit longer. He totally understands the Southwest call because the theme over the next few months is domestic over international travel and leisure over business travel. Southwest has the highest percentage of seat miles coming from domestic flights and it's more tilted toward leisure travel, said Tepper.

He thinks the question is whether or not you agree with the theme and how much is already priced in. Tepper believes a lot of this is already priced in as Southwest has outperformed the sector significantly.

Gordon is cautiously looking to add Southwest Airlines to his portfolio. The company is looking to expand and going into the COVID-19 crisis, it was better equipped as it had less debt, lower expenses and it was focused on domestic travel.

From the technical point of view, Gordon likes the chart and he finds it constructive. Southwest is the strongest in the space, but it's still not time to buy, said Gordon. He will be watching the stock.

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