We all know transportation is vitally important to the smooth running of an economy. Because of this strategic importance, the listed sector is home to a number of companies that own strategic assets. Given the high fixed-cost nature of the industry, the sector is also home to a number of companies highly leveraged to volume growth.
Here are six stocks which investors may wish to take a closer look at.
Contrarian
As I've mentioned before, McAleese Ltd (ASX: MCS) hasn't had a smooth start to listed life. In late January the share price plunged around 30% after the company announced significant contract losses within its fuel distribution business. This negative news surrounding the stock will undoubtedly make it interesting to some contrarian investors.
Arguably the sell-off was overdone however and the stock possibly represents good value at current prices – at least that is the view from brokers at JP Morgan. According to a report in the Australian Financial Review, after taking into account the latest company update, JP Morgan has a price target of $1.48 and an 'overweight' recommendation on the stock.
Defensive
Macquarie Atlas Roads Limited (ASX: MQA) and Transurban Group (ASX: TCL) both have defensive characteristics thanks to their toll-road operations which provide reliable streams of revenues. One consensus of analysts' forecasts has both companies increasing their earnings and dividends over the next two years.
Growth
As one of Australia's major rail freight operators Aurizon Holdings Ltd (ASX: AZJ is well placed to expand into new territories and win more business. Aurizon is forecast to grow its earnings from 22.8 cents per share (cps) in financial year (FY) 2013 to 27.9 cps in FY 2015 which equates to 22.4% growth over two years (consensus forecast provided by Morningstar).
Growth at a reasonable price
While Aurizon is trading on a FY 2015 price-to-earnings (PE) ratio of 17.5, Asciano Ltd (ASX: AIO) is trading on a forward PE of just 13.5. At 14% its growth to FY 2015 is forecast to be lower than its peer Aurizon, however at current pricing it may be the more appealing investment.
Yield
Sydney Airport Holdings Ltd (ASX: SYD) equally deserves a place under the 'Defensive' heading, however with a forecast FY 2014 dividend yield of 6.2% – albeit unfranked – it's a tempting option for investors seeking yield.
Foolish takeaway
The market jitters throughout January and early February have knocked some share prices down to much more appealing levels. Investors may need to act quickly to snap-up these cheaper stocks as the market appears to be on the move back up again.
