TCL - Transurban Group

[Knobby22]

Thought latest results were quite good.
Can they keep up the growth?
Cashflow is fantastic, profit (before interest expense) is a beautiful thing.

The only fly in the ointment I can see is the increased competition in this space.

 

[rederob]

Thought latest results were quite good.
Can they keep up the growth?
Cashflow is fantastic, profit (before interest expense) is a beautiful thing.

The only fly in the ointment I can see is the increased competition in this space.

Not sure there is any real competition in Oz.
Their investor presentation shows a clear pathway to increasing profits, with 2 major project opening new revenue streams mid year.
They have 5 other projects completing over the following 4 years.
They also get increasing amounts of franking into their dividends going forward, so that's an added bonus.
I also had this future thought about EVs and tolls that was along the lines of: I am not paying for petrol anymore so I can get to and from work quicker and it won't cost me much more than before. Just a thought!
I hold TCL and as it's a lot better than bank interest, I will look closely for any headwinds that offer a chance to pick up some more at a discount.

 

[hja]

I guess its lovely bull flag-planting run has come to end!

 

[hja]

Little selling pressure... heh I guess many SP200 charts look similar.

 

[Dona Ferentes]

Transurban shares were sitting at $16.34 in mid-February before the pandemic hit Australia but plummeted to near $10 in the depths of the sudden sharemarket sell-off by March 23. The stock has since recovered to about $14.

Transurban chief executive Scott Charlton is looking over the horizon to when restrictions ease and economic conditions improve. He expects road traffic numbers will pick up sharply again.

"As you come out of government restrictions the recovery, particularly on the road, happens quite quickly,” Mr Charlton said.

But in the short-term Transurban is doing it tough. Average daily traffic on the group's CityLink toll road in Melbourne, which usually produces about a third of the group's earnings, was down by about 63 per cent in the first week of August as the southern city went into a hard lockdown. The fall-off in July was 48 per cent, when Melbourne entered into a stage-three lockdown.

Traffic across all of the toll road group's operations was down 25 per cent in July.
Transurban said it did not expect to breach any debt covenants within the next 12 months, although some of its toll road assets would enter "distribution lock-up" which means they cannot pay out cash to the parent company.

- debt levels are always the issue.

 

[peter2]

I'm disappointed that TCL wasn't sold off a lot more. I'd like to buy some near 11.50. Perhaps if NSW goes into another lock down price should go lower.

I'm also monitoring ALX. I want it much lower also.

 

[mullokintyre]

Transurban may come under a bit of Pressure.
The West Gate Tunnel was supposed to be finished next year, but due to a bit of argy bargy between Trans urban and its subcontractors, not only will it not be done by then, TCL are unwilling to give a date when it will.
The project is at least 3.5 billion over budget (some say its 5 billion over), with the liklihood that it will go higher.
The tunnelling machines supposed to start under ground boring in 2019 are still sitting idle.
Can't see it getting underway any time soon.
The good news is that Ghengis Dan allowed TCL to keep increasing the Tolls on the existing roads by 4,5% a year, so that according to deloittes, TCL will pick up a cool 37.5 bill over and above its existing incomes.
The Bad news is that under the current climate, there is no way that Ghengis dan will come to the party and have Vic taxpayers chip in for the cost overun.
The other Bad news is that if Ghengis Dan were to suffer the unfortunate fate of losing the next election, the Libs will be determined to blame whatever they can on the labour government, and most likely bring in regulation to curtail some of its activities.
Despite bleating about soverign risk etc when Labour cancelled one of their pet projects and paid out 1 billion to the contractors, they would have no hesitation in promising the vic public they would rip up the TCL contracts if they thought it would help electorally.
Not sure if I want any of my money in this once generous cash cow.
Mick

 

[peter2]

Westgate Tunnel and the current lockdowns were always going to be spoilers for TCL. The price has held up very well IMO.

The price is falling after their recent news., finally. I'd like to 12.50 of lower. TCL is in my reversal watch list for a purchase in a conservative longer term portfolio. They've got gov't support to collect and increase tolls as they want. It'll be a cash machine again when the restrictions end.

 

[sptrawler]

Westgate Tunnel and the current lockdowns were always going to be spoilers for TCL. The price has held up very well IMO.

The price is falling after their recent news., finally. I'd like to 12.50 of lower. TCL is in my reversal watch list for a purchase in a conservative longer term portfolio. They've got gov't support to collect and increase tolls as they want. It'll be a cash machine again when the restrictions end.

One has to wonder what is keeping the price up.

 

[divs4ever]

Super Funds , remember most are rushing towards ESG

HOWEVER some Super Funds are lending out shares to create extra income ( Norges for example , but others like Vanguard lend shares out as well )

now IF somebody wants to create a downtrend , the next few days would be an excellent time

 

[rederob]

With Transurban's October purchase of WestConnex - via a 50% holding in Sydney Transport Partners - and most regions where it has assets returning to pre-pandemic traffic levels, TCL's share price downside risk is low. Recent settlement over a toxic soil dump site for the Wet Gate Tunnel project is expected to see tunnelling machines back in action early in the new year (Ie. once the Bulla soil disposal site is readied).

 

[rederob]

That upside breakout that looked to be on the cards actually turned out to be the opposite for a number of months until post-pandemic traffic levels surged again in Queensland and NSW. This was reflected in the average daily trip data for the March quarter (latest available):

And early April data for Qld/NSW:

And clearly shows up in the share price:

 

[peter2]

TCL on my "buy the dip" watch list but price remains reasonably strong.

 

[Dona Ferentes]

One has to wonder what is keeping the price up.

Transurban delivered record first-half earnings from its toll roads due to the return of traffic congestion and rising tolls.

The company raised its guidance for full-year dividends to 57¢ per share. It had previously told investors to expect a dividend of 53¢ per share compared with 41¢ in 2022.

...inflation will do that to you

 

[peter2]

TCL looks like it's another stock that's been sold down irrationally (oversold), but I'm not going to argue with the market and buy some yet. I'll just add it to the watch list and wait for a rally to start.

 

[UMike]

A year later.......

Was poised to get some at a long term target of $12.25.
Got close then recovered to break even on a down day.
Think I am going to lower my long term target anyway. Dividends still 8 weeks away.

 

[Knobby22]

A year later.......

Was poised to get some at a long term target of $12.25.
Got close then recovered to break even on a down day.
Think I am going to lower my long term target anyway. Dividends still 8 weeks away.

View attachment 176019

Unfortunately higher interest rates leads to higher costs for funding for projects and the latest inflation news isn't good. I decided to sell my small holding last week.

 

[UMike]

Unfortunately higher interest rates leads to higher costs for funding for projects and the latest inflation news isn't good. I decided to sell my small holding last week.

I use their infastructure..... Don't worry they have increased their rates.