5 global transport stocks with good commercial quality
As air travel skyrockets thanks to the increased deployment of the Covid-19 vaccine in the United States, investors may want to consider these five global transportation stocks because they have good commercial quality and are trading at ratios of attractive GF valuation: Shenzhen Airport Co. 000089), Xiamen International Airport Co. Ltd. (SHSE: 600897), AGP Corp. (TSE: 9377), Grupo Aeroportuario del Sureste SAB de CV (NYSE: ASR) and Grupo Aeroportuario del Pacifico SAB de CV (NYSE: PAC). These choices were found using the All-in-One Filter, a Premium feature of GuruFocus.
Air travel soars near year-long high, US carriers show optimism
The Transportation Security Administration reported on Monday that 1,344,128 people passed through security checkpoints on Sunday, compared to 1,485,553 travelers on March 14, 2020 and 2,274,658 travelers on March 14, 2019. While the TSA throughput Sunday is down more than 45% from throughput two years ago, the TSA screened more than one million passengers on Tuesday for the fifth day in a row.
Atlanta-based Delta Air Lines Inc. (NYSE: DAL) and Chicago-based United Airlines Holdings Inc. (NASDAQ: UAL) revealed in recent documents that bookings increased in March as the United States continued to expand their Covid-19 vaccine delivery. The Centers for Disease Control and Prevention said on Friday that the United States had administered more than 100 million doses of the vaccine, which allowed 13.5% of the population to be fully immunized.
Global airport stocks could benefit from increased air travel
As air travel begins to rebound in the domestic market, global airport inventories could benefit from the eventual recovery in international travel. GuruFocus’ all-in-one screener identified five tickets with a financial strength rank of at least 6, a profitability rank of at least 7, and a GF price / value ratio between 0.6 and 1 , 2.
GuruFocus’s own valuation method derives from Peter Lynch’s idea of comparing the current price of a stock to an intrinsic value. While legendary fund manager Fidelity Magellan has used profits 15 times, GuruFocus takes into account a company’s historical price multiples and makes internal adjustments for past performance and estimates of future growth.
Equities with a GF price / value ratio between 0.6 and 1.2 have reasonable valuations depending on the method. If a stock trades more than 1.2 times the GF value, it is considered very overvalued. On the other hand, stocks traded below 0.6 times the GF value can be potential value traps if measures of financial strength and profitability suggest poor quality of business.
Shenzhen Airport (SZSE: 000089) shares traded around 8.96 Chinese yuan ($ 1.38) on Tuesday, showing that the stock is slightly overvalued based on a price / ratio. GF value of 1.16.
GuruFocus ranks the financial strength of the Guangdong airport company at 9 out of 10 on several positive investment signs, including a high Altman Z score of 5.5 and interest coverage and debt ratios above 89% of its global competitors.
Xiamen International Airport
Xiamen International Airport (SHSE: 600897) shares traded around ¥18.62, showing the stock is slightly overvalued based on Monday’s GF price-to-value of 1.14.
GuruFocus ranks the financial strength and profitability of the Fujian-based airport company at 9 out of 10 on several positive investment signs, including profit margins surpassing over 85% of global competitors and interest coverage ratios surpassing over 96 % of global transport companies.
The shares of AGP Corp. (TSE: 9377) traded around 532 Japanese yen ($ 4.88), showing that the stock is correctly valued based on Tuesday’s GF price-to-value ratio of 0.91.
The Japanese industrial company supplies electric power and other services to airplanes. GuruFocus ranks the company’s financial strength 8 out of 10 on several positive investment signs, which include interest coverage and debt ratios outperforming over 85% of its global competitors despite a low Piotroski F score of 3 .
Grupo Aeroportuario del Sureste
Grupo Aeroportuario del Sureste (NYSE: ASR) shares traded around $ 179.31, showing the stock is slightly overvalued based on Tuesday’s GF price-to-value ratio of 1.12.
GuruFocus ranks the company’s profitability 9 out of 10 on several positive investment signs, which include a four-star business predictability ranking and profit margins and returns surpassing over 85% of global competitors.
Grupo Aeroportuario del Pacifico
Shares of Grupo Aeroportuario del Pacifico (NYSE: PAC) have traded around $ 112.69, showing that the stock is slightly overvalued based on Tuesday’s GF price-to-value ratio of 1.11.
GuruFocus ranks the company’s profitability 9 out of 10 on several positive investment signs, which include a four-star business predictability ranking and profit margins outperforming more than 88% of its global competitors.
Disclosure: The author has no position in the mentioned actions. Mention of stocks in this article is not a recommendation. Investors should do their own research and consider all the risks involved in purchasing equity securities, especially for global companies.
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About the Author:
I am an editorial researcher at GuruFocus. I have a Masters in Finance from SMU and enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!