Along with the broad market, the transport sector has been extremely hot this quarter and is currently boasting a number of opportunities suitable for the value investor. These are stocks with reasonable dividend yields, trading close to book value and at competitive multiples to last year's earnings. Below we list a few of them, along with relevant recent news and fundamentals.
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GATX Corporation (NYSE:GMT) operates in the railway, marine transport and industrial equipment businesses. In just the last three months, the company's shares have climbed by nearly 24%. That's a good measure better than the broader transport sector, as represented by the iShares Dow Jones Transportation Average ETF (NYSE:IYT), which has climbed by 15% over the same period, and the general market represented by the SPDR S&P 500 ETF (NYSE:SPY), which has climbed less than 12%.
GATX pays investors an annual yield of 3.4% and trades with a one year trailing P/E of 18.6. The company just completed a large acquisition of freight rail cars, worth approximately $150 million. GATX shares have a current price-to-book ratio of 1.38.
Hong Kong Rail Traffic
Guangshen Railway Company, Ltd. (NYSE:GSH) runs a freight and passenger transport operation through Guangdong province in China. That includes over 100 pairs of long-distance, intercity commuter trains and 100 trains operating within more densely populated corridors.
The company's shares climbed 15% in the last three months and now sell with a P/E of just 13.7. The annual dividend yield for the stock is 2.9%. Guangshen also sells for just a fraction of the firm's breakup value, with a price to book ratio of 0.83. For the last three years, management has grown sales at an incredible rate of 51% per annum.
Profitable Greetings from the Cancun Airport Authority
Grupo Aeroportuario del Sureste (NYSE:ASR) operates airports throughout the tourist-friendly southeast region of Mexico, including popular destinations such as Cancun and Cozumel. The company's outlook brightened in the latest quarter, and the stock jumped 10.2%. It now trades with a P/E of 18 and offers a yearly payout of 3.9%. ASR operate Mexico's first privatized airport group and recently announced a significant 10% year-over-year increase in foot traffic that was accompanied by a 30% rise in third quarter profits.
The Bottom Line
Transports don't always get the attention they deserve. And the above listed issues are not household names for most investors. But look them over. Fundamentally, they're as sound a bet as any. (Driving is often the most convenient way to get around, but it'll cost you. Check out The True Cost Of Owning A Car.)
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