COVID-19 has made this a year of winners and losers for ASX transport shares. Let’s take a look at the top 3 and worst 3 performers.
The post 3 best and worst performing ASX transport shares of 2020 appeared first on The Motley Fool Australia. –
The year 2020 has not been kind to the transport sector, with some of the biggest names biting the bitter pill in a year that’s been lost to the coronavirus pandemic.
Airlines and airports have naturally been hit hard this year. However, there are also some transport shares that have done well in 2020.
Let’s take a look at the top 3 winners and losers in ASX transport shares in 2020.
First, the losers…
|Company||1-year share price return||Current share price||Market cap|
|1. Qantas Airways Limited (ASX: QAN)||-33%||$4.89||$9.2 billion|
|2. Sydney Airport Holdings Pty Ltd (ASX: SYD)||-28%||$6.35||$17.2 billion|
|3. Aurizon Holdings Ltd (ASX: AZJ)||-25%||$4.04||$7.47 billion|
The national carrier’s share price has seen some volatility this year, being pushed up and down at the slightest news on the virus outbreak.
The Qantas share price lost 33% this year, after losing 70% in March and dropping to its 52-week low of $2.03. The share started to pick up in November after news of successful vaccine testing was announced to the market.
Light is starting to appear at the end of the tunnel however, with the airline saying last week that its budget offshoot Jetstar will already exceed pre-COVID volume of flights within 3 months.
Although international leisure travel may still be months away, the airline revealed that its domestic capacity was already at 68% of pre-COVID levels for December, rising to nearly 80% for quarter-three.
Qantas delivered underlying profit before tax (NPAT) of $124 million for full year FY20, down 91% from FY19.
The Sydney Airport story in 2020 has pretty much followed the fate of Qantas.
The airport’s shares had fallen by 50% in March, before recovering as economic outlook progressively improved in the second half of the year.
The company revealed that for the month of November 2020, it saw total passenger numbers decline by 90.6% to 350,000.
Sydney Airport has suspended dividend payments for the first time ever in its history, after reporting a $51.8 million net loss after tax, compared to a profit after tax of $200 million in the corresponding 2019 period.
The airport’s shares will certainly be one to watch in 2021 when the economy and travel are expected to be back to normal.
Aurizon is not perhaps covered tremendously in the media. After all, it’s a rail freight operator company.
However, the company is a large juggernaut, transporting more than 250 million tonnes of Australian commodities – connecting miners, primary producers, and industry with international and domestic markets.
The Aurizon share price has lost a bit of shine this year, losing 25% in value as commodities exports dwindle in the face of the pandemic. Near term headwinds will come in the face of the continuing Australia-China political spat, as Australian coal has apparently been added to Beijing’s ban list.
Given the tough market, the company actually delivered an impressive full year FY20 NPAT of $531 million, up from $473 million the previous year.
And now for the winners….
Here are the top 3 performing ASX transport shares in 2020. The winners have been dominated by small cap shares, with the airlines Rex leading the charge.
|Company||1-year share price return||Current share price||Market cap|
|1. Regional Express Holdings Ltd (ASX: REX)||+64%||$1.965||$212.6 million|
|2.Alliance Aviation Services Ltd (ASX: AQZ)||+65%||$4.04||$646.6 million|
|3.Wiseway Group Ltd (ASX: WWG)||+15%||$0.22||$32.2 million|
The Rex share price has gained 64% in 2020, with 25% made in the past month alone.
Rex has been a favourite for investors recently, after it announced that it will break out of its regional roots and start servicing the “golden triangle” route.
The Golden Triangle refers to the Sydney-Melbourne-Brisbane routes – among the busiest in the world.
The airline was brought to its knees back in March as passenger numbers plummeted 90%. Rex subsequently announced a loss after tax of $19.4 million on a turnover of $321.8 million for financial year 2020.
The Alliance Aviation share price has performed brilliantly in 2020, gaining 54% and reaching its all-time high of $4.08 on 18 December.
Why has the company performed solidly this year while other airlines floundered?
First, Alliance generates income by providing contract, charter and allied aviation services to the mining and energy industry, both locally and internationally. The company actually delivered a profit before tax of $47.7 million in FY20 (+24.1% compared to the previous year).
Unlike other aviation and airport businesses, Alliance Aviation provides aviation services to mainly iron ore, gold, copper and uranium sectors, with the commodities industry representing 53% of its total contract value in FY20. As some of these exports have maintained their strong demand this year, so has demand for Alliance’s services.
You can’t blame yourself for not having heard about this company.
Wiseway describes itself as “one of the leading forward freight companies in Australia”, offering “extensive high-quality services for the whole Australia wide and globally”.
The company services all aspects of international forwarding and logistics, including air freight, sea freight, customs clearance, transportation, warehousing, distribution, and logistics solutions.
The Wiseway share price has gained 15% this year, with revenues up 53% to $31 million for the first quarter of Fy21. This was up $10.7 million from the prior corresponding period.
The $31 million in revenue for FY2021 so far compares favourably with the total revenue of $102.6 million that the company banked in the entirety of FY2020.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
- ASX 200 ends slightly down
- ASX 200 down 0.4%: NIB jumps, a2 Milk rebounds, WiseTech sinks lower
- ASX 200 Weekly Wrap: ASX hits new post-March high
- 3 recovery ASX shares to buy for 2021
- 2 ASX dividend shares for 2021’s zero interest rate world
Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Aurizon Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
The post 3 best and worst performing ASX transport shares of 2020 appeared first on The Motley Fool Australia.