George Boubouras is chief investment officer at Contango Asset Management

How long have you held the stock?

We have had an overweight position to Sydney Airport Holdings (SYD) for nearly a year.

What do you like about it?

We were targeting cyclical infrastructure exposure with the core view of lower long bond rates maintained for longer. Airport assets generally perform well in a lower rate environment. Further, it is a well run asset from the retail/property management through to the key stakeholder partners (airlines).

How is it better than its competitors?

Many of the competitors are not listed. Those with access to quality airports are effectively just Sydney and Auckland Airport.

What do you like about its management?

We like its sound management that continues to deliver a clear strategy that is executed well.

What is your target price on Sydney Airports?

Our internal price target is at various ranges above $6.25 that reflect different scenario analysis.

At what point would you sell it?

The stock is up 24% year to date so it has already performed above initial expectations. Above our price target would be a potential signal to rebalance.

How much has it added to your overall portfolio over the last 12 months?

It has added significant alpha to our large cap portfolio.

Is it a liquid stock?

Yes, very liquid.

Where do you see the value?

In the global and domestic rate cycle, asset mix from retail through to airline partner agreements and, importantly, the strategic vision to optimise asset even further. Plus the quality management.

Sydney Airport

Source: Yahoo!7 Finance, 17 September 2015

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