Sydney Airports – Strong international traffic growth

SYD reported October 2017 traffic with total passenger growth of +3.8%. International growth was up +5.8%, while domestic growth was up 2.8%.

Strong international traffic growth should continue to underpin dividend per share growth of 2- 3%.

Sydney airport is trading near full value and investors should add a covered call option to enhance the yield.

We hold SYD in our ASX 50 model portfolio.

 

 

Is Retail Food Group In The Buy Zone ?

Shares of RFG have traded as high as $6.25 in January of this year. Since then the price has dropped over 30% to the current level of $4.40.

RFG is now priced at a trailing P/E of 12X , which is lower than the industry standard of 23X.

The stock is currently trading at -51% below its intrinsic level of $8.9. This mismatch indicates a potential opportunity to buy low as MD Andre Nell expects underlying net profits to rise about 6% in 2018.

Finally, its debt relative to equity is 54%, which has been diminishing over the past couple of years showing its capacity to pay down its debt.