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Is the Sydney Airport Holdings Pty Ltd (ASX:SYD) share price in the buy zone after today’s update?

The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price has been dragged lower on Tuesday with the rest of the market.

At the time of writing the airport operator’s shares are down 0.5% to $6.57. This latest decline leaves them within touching distance of a 52-week low of $6.24.

Should you invest?

While I have had concerns in the past that Sydney Airport’s shares could be negatively impacted by rising bond yields along with fellow bond proxy Transurban Group (ASX: TCL), I think this has been largely priced in now by the market.

Which could mean that it is worth considering an investment in the airport operator, especially given its strong traffic update this morning.

That update revealed that October was the busiest month the airport has experienced all year. A total of 3.9 million passengers travelled through its gates during the month, up 3.2% on the prior corresponding period.

International passengers were the biggest driver of growth, rising 6% on the prior corresponding period to 1.43 million. Domestic passenger numbers grew a solid 1.6% to just under 2.5 million.

Year to date this means that total passenger numbers have risen 2.9% on the prior corresponding period to 36.7 million.

According to Sydney Airport CEO Geoff Culbert, the strong October result was driven by both seat capacity growth and stable load factors.

He advised that: “Sydney’s fastest growing foreign nationalities included Japanese (13.0%), American (12.3%) and Indian (10.1%) visitors. Australian outbound international passenger growth also performed well increasing 8.6% for the month, with many Australians choosing to travel overseas during the September/October school holiday period.”

Should you invest?

As I mentioned here yesterday, I think Sydney Airport could be a great way to profit from the inbound and outbound tourism boom that Australia is experiencing. I feel today’s traffic update highlights exactly why.

In addition to Sydney Airport, I believe integrated travel company Helloworld Travel Ltd (ASX: HLO), online travel agent Webjet Limited (ASX: WEB), casino and resorts operator Crown Resorts Ltd (ASX: CWN), and ferry company Sealink Travel Group Ltd (ASX: SLK) could also be positioned well to benefit from the boom.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Crown Resorts Limited, Transurban, and Sydney Airport Holdings Limited. The Motley Fool Australia owns shares of Helloworld Limited. The Motley Fool Australia has recommended Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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