TCL

Transurban (TCL) is a stock that doesn’t like higher oil prices, (less driving in general, less miles in specific) or higher interest rates (as a) debt servicing costs rise, and infrastructure stocks are geared beasts by necessity, and b) are long duration, meaning they are highly sensitive to changes in the discount rate).

It is the change in stuff, that matters, so despite my poor labelling on rates, the factor loadings line up with what we’d expect. 10 year nominal rates are the simple addition of real rates and breakevens (we split them here because the give us more colour on what is driving returns) and we also include the level of real rates.

Image

Despite that, the share price has held up somewhat better than I’d have expected. Trending down, sure, but really only half of the 2019 outperformance.

Image

It is a widely held favourite with fund managers, and retail punters, alike, which probably helps keep it trading above where we’d expect.

Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.

This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

Please note that past performance is not a reliable indicator of future performance.

General Advice Warning: This document has been prepared without taking into account your objectives, financial situation or needs, and therefore you should consider its appropriateness, having regard to your objectives, financial situation and needs. Before making any decision about whether to acquire a financial product, you should obtain and read the relevant Product Disclosure Statement (PDS) or Investor Directed Portfolio Service Guide (IDPS Guide) and consider talking to a financial adviser.

Taxation warning: Any taxation considerations are general and based on present taxation laws and may be subject to change. Aequitas is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and investors should seek tax advice from a registered tax agent or a registered tax (financial) adviser if they intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.

Receive our investment insights

Something went wrong. Please check your entries and try again.

Recent Posts