Ferrovial SA (FER-SM) Buy, Sell or Hold

Ferrovial SA (FER-SM)

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Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

The stock is doing very well, up 50% this year, bringing market cap to $50B and valuation to a not-cheap 51X earnings. Yield is 0.40%. Debt is quite high, at 7X cash flow. Earnings are very variable, but with good overall decent growth. But, consensus calls for lower growth next year. It has benefited from a big shift to infrastructure projects. However, its valuation and debt make us far less enthusiastic towards it than we might be otherwise.
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PAST TOP PICK

(A Top Pick Feb 10/20, Down 20%) Heathrow and 407 are its two main assets. Hit by pandemic. But these will not be permanent impairments to the business. Excellent asset to own over the long term. Compelling at current valuation.

HOLD

A transportation and infrastructure name. It has been disappointing, especially with the shutdown heavily affecting this sector. The 407 is still the crown jewel in all of transportation infrastructure. Long term, it is still a good investment. Once COVID is under control, people will not want to take public transport. We will probably see more driving.

PAST TOP PICK

(A Top Pick Sep 27/19, Down 26%) One of the best old-school infrastructure companies. Great assets including a stake in the 407 -- the crown jewel in concession assets. They are divesting their more volatile assets. He still likes the long term outlook.

TOP PICK

A 47% investor in the 407. This is an infrastructure giant from Spain. 25% stake in Heathrow. The upside to the 407 is not fully appreciated. The managed lane opportunity in the US is underappreciated. (Analysts’ price target is $30.50)

TOP PICK

A defensive real asset holding. A Spanish listed infrastructure company with a list of world-class assets. They own over 43% of the 407 ETR -- high quality, high margin business with a long life (until 2098). It trades at a premium to peers, but there is still catch up in value, he believes. Yield 2.77% (Analysts’ price target is $29.08)

TOP PICK

An infrastructure company and their 2 assets are the Highway 407 and Heathrow Airport. A good example of an infrastructure company that has been beat up giving a decent dividend yield and 2 great assets that give you inflation protection. Trades at a big discount to its replacement costs. Dividend yield of 4.87%. (Analysts’ price target is $20.92.)

COMMENT

With global utilities or yield plays falling, what would be a good name to buy? This one is a Spanish infrastructure group. It is utility-like in that they own part of the Highway 407 toll road, so you are almost getting an infrastructure play. This gives you a long dated asset that is earning 5%-6%, compared to where 30-year yields are in the 2% range. Thinks it is good value moving forward.

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Ferrovial SA (FER-SM) Frequently Asked Questions

What is Ferrovial SA stock symbol?

Ferrovial SA is a OTC stock, trading under the symbol FER-SM on the undefined (undefined). It is usually referred to as or FER-SM

Is Ferrovial SA a buy or a sell?

In the last year, no analyst issued a Buy, Sell, or Hold rating on FER-SM on Stockchase. Read the latest expert commentary for Ferrovial SA.

Is Ferrovial SA a good investment or a top pick?

Ferrovial SA was recommended as a Top Pick by David Driscoll on 2016-11-14. Read the latest stock experts ratings for Ferrovial SA.

Why is Ferrovial SA stock dropping?

Earnings reports or recent company news can cause the stock price to drop. Read stock experts' recommendations for Ferrovial SA.

Is Ferrovial SA worth watching?

Ferrovial SA is followed by 18 investors on Stockchase and is a trending stock that is worth watching.

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Ferrovial SA (FER-SM)