Is the Transurban Group (ASX: TCL) share price a bargain? It has fallen 24% over the past two months because of the coronavirus.
Transurban is a very large infrastructure business which operates toll roads across Australia and the US.
There has obviously been an enormous drop in traffic across its network of roads with people largely staying indoors.
The last week in March 2020 saw a 48% decrease of traffic across Transurban's whole network. Not good for the earnings or Transurban share price!
Thankfully large vehicle traffic held up better than cars. In the last week of March 2020 large vehicle traffic was down 13% and made up 42% of toll revenue. At the beginning of March 2020 large vehicles made up around 25% of toll revenue.
Is the Transurban share price a buy?
Any time a business loses around a quarter of its value I think it's worth looking into. Particularly as Australia's record low interest rate should now make Transurban even more attractive.
We can look to China where traffic levels are returning to more normal levels. Perhaps over the coming weeks we'll see traffic numbers start to recover?
But for me the concerning thing is will life go back to the old normal or a new normal? A lot of people and businesses may be seeing the benefit of working from home. There is a possibility that some of the traffic levels may simply never return.
There could be others that will need to keep driving but may question paying for a toll on top of all the other car expenses. If Australia is indeed headed for a recession people may want to hold onto their money where possible.
I don't think the Transurban share price is a buy, I think it's probably at a fair price now. If it fell below $10 it may look more interesting, but I think there are plenty of dividend shares I'd rather buy first.
