Image source: Getty Images
A new wave of COVID-19[female[feminine has seen Australia’s two largest cities shut down in recent weeks.
So it’s still an uncertain time to be in the transport business.
However, does that mean the industry only gets benefits from here as the world wakes up from its pandemic slumber?
Three stock market experts weighed in recently, picking 2 quality ASX stocks they think investors might consider.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
The monopoly Sydney Airport has attracted the attention of several fund managers.
Portfolio manager TMS Capital Ben Clark said this ASX transport action is “a crack buy”.
“Whether it’s 2022 or 2023, it will recover, and I actually think travel will go up beyond the number of passengers that would have been without COVID,” he said. Livewire.
“And then the other thing I think is that we will probably all have to spend a little more time at airports as travel resumes. There are probably new sources of income – maybe doing some testing before you get on a plane, etc.
Sydney Airport shares rose 1.38% on Friday to end the day at $ 5.86. The stock is down 8.58% this year.
Portfolio manager Wavestone Capital Catherine Allfrey agreed it was inevitable that the airport would come back roaring.
“We are prepared to wait for that with a company like Sydney Airport, which we see as a monopoly asset here in Sydney,” she said. Livewire.
“It’s an iconic asset and these tourists will come back and again, this business will thrive. So this is a company that we believe in terms of a long-term trend will benefit.
Clark said the unknown of exactly when the trips would actually return created “a great opportunity for pricing.”
“So you have to buy it while the uncertainty reigns.”
Another company from Macquarie Group Ltd. (ASX: MQG), Atlas Arteria owns and operates toll roads in the United States and Europe.
Watermark Funds Management Investment Director Justin Braitling sees it as a “strong buy”.
“These European infrastructure assets have recovered well. The road brochures will become normal ”, he declared. Livewire.
“It’s on a 6% yield and unlike a lot of other infrastructure games, the dividend is expected to increase well in the years to come.”
Clark observed that road traffic in France was “resilient”, currently reaching 75% of pre-pandemic levels.
“The major asset of these guys is the highway that connects Paris to Lyon,” he said.
“France is opening up. Tourism is really starting to pick up in Europe, albeit in spurts. “
Like Sydney Airport, Clark said the Atlas Arteria share price was selling “at a significant discount from its current level.”
“In addition, a large part of the debt is now fixed, while the tolls are linked to inflation. So it’s probably one of those players who could get by in an inflationary environment. “