I spent a little time this weekend looking for and learning about publicly traded toll roads (these tend to trade on foreign exchanges). This came about from the recent listing of the iShares Infrastructure Fund (IGF) which owns quite a few of them.The appeal of these stocks is that they should have a low correlation to US stocks, not be very volatile, have some yield and benefit from constant demand; the need to get somewhere.
The drawbacks seem to be low rates of organic growth, some of them have a lot of leverage and some of them do a lot of acquisitions so the idea of one of the acquisitions going badly seems within the realm. What follows is a list from IGF's holdings and the symbol (not all of them have symbols for US trading) linked to Yahoo Finance.
Abertis ABE.MC in Spain or ABFOF on the pinks
Transurban TCL.AX Australia or TRAUF on the pinks
Brisa Auto Estradas BRS.LS in Portugal and BAUEF on the pinks
Cintra BCIN.MC in Spain CCIDF on the pinks
Zhejiang Expressway 0576.HK in Hong Kong ZHEXY might be the pink sheet symbol
Societe Des Autoroutes Paris(aka Paris Rhin Rhone) ARR.PA in Paris no pink sheet symbol
Jiangsu Expressway 0177.HK in Hong Kong JEXYY on the pinks
Autostrada AT.MI in Italy AUOSF might be the pink sheet symbol
Treat all of the pink sheet symbols as best effort and any of them could be wrong. If you know of any other publicly traded toll roads please leave them in the comments. I would add that all of the various Macquarie products traded around the world also have exposure but that can change at any time.
All of the companies have websites where you can learn more about them in addition to what might be on Yahoo Finance.
I bought one of the above personally with a 2% weighting. I have not decided about adding it for clients and so won't disclose it so that I don't front run what I might do for clients. Since there is no commentary about any of the names just a mention that they exist I believe not disclosing the name is kosher.
On a totally unrelated note has any NFL punter had a worse day on the field than Packers punter Jon Ryan had yesterday?
15 comments:
You missed Macquarie Infrastructure (MIC), one of the biggest funds.
One criticism of these stocks is that they don't appear to earn their cost of capital, and keep issuing debt and equity to pay the dividend.
Well I mentioned that I was excluding the Macquarie funds from the list because their exposure can change. Also, for now MIC appears to be out of the toll road business.
forgot, MIC is a personal and client holding
This is not a fund but an investment in the same vein that may be worth consideration. Canadian SNC Lavalin is possible candidate for toll road investments in that it owns and operates highway 407 through Toronto, ON. It also has other infrastructure possessions worth consideration. Here is a copy from their web site URL quoted below:
"Privatization has created a need for concession projects, which SNC-Lavalin is particularly well-positioned to meet. Its Highway 407 toll road is the largest privatization project in Canadian history, and unique in that it has no toll booths and does not require drivers to stop. Since its inception in 1999, it has become recognized as one of the most successful road concessions in the world."
URL: http://ca.wrs.yahoo.com/_ylt=A0geumPk0W9HCH4B.TDrFAx.;_ylu=X3oDMTExbTV0dDR1BHNlYwNzcgRwb3MDMQRjb2xvA2FjMgR2dGlkAwRsA1dTMQ--/SIG=11v7teqf6/EXP=1198596964/**http%3A//www.snc-lavalin.com/en/2_0/2_11.aspx
thank you for the link, but dude, you gotta tiny URL that next time, tough for other people to get such a long link in the comments.
anyone interested can click here
MIC?
Do you mean MGU?
In a group of etfs and some cefs to fill in the gaps MGU was in top 15% and higher during the last month. Got stopped out as I tightened stops in this uncertain mkt. Dive was exaggerated due to a huge disribution/dividend and I won't even get the dividend.
Roger, are the toll roads the big attraction of the new etf? Seems like global infrastructure can mean so many different things.
jasper
At different times MGU owns different things. The top ten right now looks like it has a lot of toll roads but in the past it has owned a lot of utilities, if memory serves.
Of course the holdings on ETFconnect are dated 8/31 and could completely different.
Its not so much that toll roads are the main attraction of the fund but more about exploring what I think is a space in the market (toll roads are just one thing along with ports and airports and such) that will become more important.
I've had MIC for a while now and it has done very well and i think the entire segment should continue to see capital flows for quite a while.
I generally agree with the infrastructure idea. I owned MIC for a period of time shortly after it was issued. When they appeared to be having some accounting concerns, I bailed out with a small profit. As it turned out, I was wrong and regret the decision.
However, in the back of my mind, I wonder if those countries (especially in the development stage) granting privitization of infrastructure may at some point pull a "Putin/Chavez" and nationalize assets on the grounds of punishing greedy (sic) capitalists.
Just like the natural resource exploration and production industries.
Here is a somewhat dated article about MIC.
http://tinyurl.com/29y8w9
I was wondering about the infrastructure trusts. "Macquarie also operates 20 infrastructure trusts, which operate much like Real Estate Investment Trusts."
Are they under different symbols than MIC?
http://www.askstockguru.com/cgi-bin/s?s=MIC
Well anyway, here's wishing a very merry Christmas to you Roger and all your readers (even the Heckler).
T the privatization issue you cite is obviously a low probability but i think speaks to not concentrating too much in any one country.
JackS, Macquarie has a ton of product on different exchanges around the world. In the US is MIC (the one I own)the trust, MGU & MFD closed end funds and their name is on an ETF here; GII. Two holdings from Macquarie that are in IGF are Macquarie Infrastructure Group ticker MCQRF and Macquarie Airports ticker MQRSF.
Both MCQRF and MQRSF have their primary listings on the ASX.
I have not studied those two in detail.
Be careful with Macquarie products. Some of its closed end funds have LARGE expense ratios.
I really like your blog- have to check on it more often. If you are interested in GeneralFinance's credits search for General Finance ContactCenter.
To learn more about Macquarie: http://money.cnn.com/2007/09/17/news/international/macquarie_infrastructure_funds.fortune/index.htm
Cintra is semi owned by the King of Spain I heard... I also heard that mega highway being built from Mexico to Canada through the US is going to be partly owned by Cintra... and its all in correlation to the coming merger of US with Can/Mex.
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