Should you buy Auckland International Airport Ltd?

The latest market-sensitive announcement is just one small step in Auckland International Airport Ltd's (ASX:AIA) master plan.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

What: Coming on the back of a strong annual report and recent capacity expansions, Auckland International Airport Ltd (ASX: AIA) recently reported an additional capacity increase by its chief airline and I expect more to come.

In a strange coincidence given that I'm heading to Fiji for three months on Friday, Air New Zealand announced a further 16,000 seats – an increase of 12% – would be available between Auckland and Nadi airports beginning in May 2015.

So What?
Well, Auckland Airport is in the middle of an ambitious 30-year plan that will see major facility expansions timed to take advantage of rising tourism and bustling economies in South-East Asia.

Just over a month ago, China and Singapore Airlines announced another 115,000 seats would be available between Singapore-Auckland and Taipei-Brisbane-Auckland beginning this year.

While the increases so far are modest, they are expected to happen at a continuous rate over the next few decades, delivering an impressive stream of growth to Auckland Airport investors.

Investors can also rest comfortably knowing that the management is top-notch and is able to write annual reports in plain speech without resorting to jargon.

Better yet, Auckland Airport is rated by World Airport Awards as the second best airport in the world in the 10-20 million passenger category for 2014; beaten only by Canada's Vancouver.

Now What?

While breaking into the top 10 airports in larger categories will be very difficult thanks to the entrenched position and quality of competitors, Auckland Airport is nevertheless a high-quality asset with a long future ahead.

The company has thankfully dropped from its ridiculous over-valuations earlier in the year to a more modest $3.46, a price I would be perfectly happy to buy at because Auckland enjoys a perfect combination of internal expansion and external growth. This combined with long-term macroeconomic tailwinds make it a very appealing long-term buy.

These are characteristics also held by The Motley Fool's latest Top Stock Pick for 2014-2015, a small-cap company putting in the hard yards in anticipation of what I expect to be a coming gold rush for its industry.

After taking a quick squiz through our free report, I think you'll know intuitively why this company makes a great investment in our current super-low interest rate environment.

I already own shares in this business, and I'm considering buying more despite the price rises it's already enjoyed – because I think there's a lot more where that came from.

Our report is a great read, free, and if you're interested – you should be – you can access it simply by clicking on the link below and entering your email address.

Don't hesitate, it is completely FREE!

Motley Fool contributor Sean O'Neill doesn't own shares in Auckland International Airport Ltd.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »