What’s Happening to the Share Price of Sydney Airport?

What does Sydney Airport do?

Sydney Airport [ASX:SYD] provides the facilities and infrastructure associated with operating an airport.

Its main revenue comes from collecting aeronautical service charges from the airlines for the number of passengers arriving and departing, as well as runway, aircraft parking and security charges.

Additional revenue comes from retail and property rents. Another significant source of revenue is the car parking charges to park at the airport.

This is a follow up to a posting I made yesterday on Auckland International Airport, which you can see here. Both these companies are making all time new highs. You can start to put the charts together to get an indicator of economic conditions.

Anyway, what is the chart telling us?

What does the chart look like?

I find it helpful to bring up a chart. The monthly chart of SYD.

Sydney Airport

Source: STEX

The company is making all time new highs. Revenue must be growing for this to happen.

Since the GFC bottom in early 2009, the share price has really taken off and has never had more than two or three months down. That tells you what you need to know. It suggests the business fundamentals are strong. We could expect the results for the June quarter to be positive, something along the lines of increased revenue growth. Let’s wait and see.

What now for SYD shares?

We could expect further positive news from this company suggesting revenue is growing and that passenger numbers are up. Also perhaps, that its airline customers are developing new routes and additional capacities.

We can only expect those passenger numbers to increase, especially from Asian inbound tourists. Particularly China’s growing middle class, who now have the money and means.

Chinese visitors to the airport have doubled in the past three years, according to a recent report from the Australian Business Review. Sydney Airport is set to profit from this growing trend.

More broadly for the economy, the chart is suggesting tourism is up, people are on the move and there is money to spend. It’s a bullish sign for the economy.
Use the charts to tell you what is happening in the economy and to forecast announcements. You can get started on that here.
Terence Duffy,
Research Analyst, Cycles, Trends and Forecasts

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Terence Duffy is an analyst and chartist, specialising in researching economic trends and cycles.  His primary focus is housing and land affordability. But you can also depend on him to offer his unique analysis of stock market charts. As Terence will show you, the charts often forecast, well in advance, the good or bad news to come — which he details in Cycles, Trends and Forecasts.

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