Wednesday, 28. June 2017  
09.09.2016 01:03
Author: Alex Waber

STOCK SCREEN: Transport Industry Stocks With Solid Upside To Intrinsic Value

 

The Transport sector is diversified into 5 major subsectors with Airlines, Bus & Rail, Freight/Shipping, Postal & Express and Infrastructure.

As diversified the transport industry is, as different are the current trends in the subsectors. Airlines, Bus & Rail and Postal/Express are rather weak spots, plagued by overcapacity in the airline industry, innovators like Uber in the Bus & Rail industry, and new entrants like Amazon putting pressure on revenues and profits for incumbants in the Postal/Express industry.

However, in Infrastructure, companies tend to report robust growth in July/August traffic volumes compared to 2Q16 and in the Freight/Shipping industry the focus since a few weeks has been on Hanjin's insolvency, leading to a recovery in freight rates, while Hyundai might acquire some of these assets. The recovery in freight rates has been noteworthy with the Drewry Hong Kong-Los Angeles Container Benchmark Rate per 40-foot Box jumping to USD 1700 in September from around USD 700 three months ago. However, caution is warranted as roughly 5% of the global container fleet sits idle and Hanjin’s total fleet constitutes 3% of the global fleet which will likely find their way back to the market sooner or later.

 

In looking for ideas this week, we screen the sector for stocks with solid upside to our AVM’s Graham intrinsic value estimate, after a period of 18-months and 20 percent of under-performance compared to the S&P.

 

Here are the filter criteria:

1. Market capitalization above 500 mio.

2. Upside to fair value based on our AVM’s Graham valuation approach.

 

Here is our list of stocks matching all criteria in alphabetical order. Company names in the table below are linked to the ANALYZER, our single stock analysis tool. Intrinsic Value Model assumptions can be adapted in the MODELER, our modeling and forecasting environment:

 

CLICK COMPANY NAME FOR DETAILED STOCK VALUE ANALYSIS

COUNTRY

LAST PRICE

MARKET CAP.

MEAN MULTIPLE UPSIDE [%]

GRAHAM UPSIDE [%]

GREENBLATT UPSIDE [%]

DIVIDEND YIELD [%]

 AP MOELLER-MAERSK A/S-B

 Denmark

10240.00

31609

-13.9

38.2

33.5

3.0

 BPOST SA

 Belgium

23.50

4700

-19.8

39.6

-13.5

5.6

 CIA DE DISTRIBUCION INTEGRAL

 Spain

21.06

2795

-57.7

32.0

23.4

4.0

 GO-AHEAD GROUP PLC

 United Kingdom

2179.00

937

97.0

85.8

23.9

4.8

 GOLAR LNG PARTNERS LP

 USA

20.43

923

66.9

28.6

64.7

 POSTNL NV

 Netherlands

4.02

1782

65.6

93.2

90.5

0.0

 STAGECOACH GROUP PLC

 United Kingdom

228.00

1308

76.0

70.1

9.3

5.2