Rakesh Gangwal Spends US$107m Buying Southwest Airlines Shares

Those following along with Southwest Airlines Co. (NYSE:LUV) will no doubt be intrigued by the recent purchase of shares by insider Rakesh Gangwal, who spent a stonking US$107m on stock at an average price of US$29.64. That purchase boosted their holding by 57,043%, which makes us wonder if the move was inspired by quietly confident deeply-felt optimism.

Check out our latest analysis for Southwest Airlines

The Last 12 Months Of Insider Transactions At Southwest Airlines

Notably, that recent purchase by Rakesh Gangwal is the biggest insider purchase of Southwest Airlines shares that we've seen in the last year. That means that an insider was happy to buy shares at around the current price of US$31.04. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices.

Happily, we note that in the last year insiders paid US$109m for 3.70m shares. But they sold 157.00 shares for US$4.0k. Overall, Southwest Airlines insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Southwest Airlines

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Southwest Airlines insiders own about US$193m worth of shares (which is 1.0% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Southwest Airlines Tell Us?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Southwest Airlines. Nice! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 3 warning signs for Southwest Airlines (2 are significant) you should be aware of.

Of course Southwest Airlines may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.