Southwest Airlines

Southwest Airlines
Until my recent flight aboard Southwest I would have told you its competitive advantage is a low-cost structure. Not after flight 211Q from Hartford to Baltimore. CEO Herb Kelleher's right. His people make the difference.

It's easy to look down at the airline industry with its high costs, low margins, overcapacity, and commodity services, but that doesn't mean you can't find value, or learn a lot watching a company like Southwest (NYSE: LUV) grow sales, earnings, and cash flow every year.
And if you like learning about businesses, not just trolling for ticker symbols, Southwest is a story not to be missed.

A few points about Herb Kelleher's maverick airline. In an industry notorious for losing money, Southwest thrives. It's had 27 straight years of profitability. If you bought 100 shares of Southwest in 1985 at $26.88 and held through the end of last year, your stake would have appreciated 858% to about $24,864 (with dividends reinvested). That's an average...