With its strong domestic-oriented franchise, a healthy balance sheet, and a new concession negotiation coming up, I liked Grupo Aeroportuario del Central Norte (OMAB) (“OMAB”) back in April on what I thought was a market overreaction to the pending impact of COVID-19. While COVID-19 has indeed hit the business hard, the market has come to terms with the issue and the shares have risen almost 50% since then.
I’m still bullish on OMAB, but not quite as aggressively as before. While I do believe that OMAB’s leverage to domestic travel within Mexico is still a relative advantage over its peers, Grupo Aeroportuario del Sureste (ASR) and Grupo Aeroportuario del Pacifico (PAC), I believe Mexico’s weak economy is likely to pressure business travel in the near term, and I likewise believe OMAB is going to see some challenges from the restructurings at Aeromexico and Interjet. The pandemic should also help the company in its concession negotiations, and I still see double-digit annualized return potential here.
Read the full article here:
No comments:
Post a Comment