Every investor is on the lookout for bargain buys right now, but one ASX share that I’m not hearing much about is Qube Holdings Ltd (ASX: QUB).
What does Qube Holdings do?
Qube is Australia’s largest logistics provider and operates as a specialised integrated port services provider across Australia, New Zealand and South East Asia.
Qube has over 130 locations and more than 6,500 employees with a market capitalisation of over $5 billion.
That demonstrates an established (and successful) business to me, but why could Qube shares make you rich in 2020?
Why Qube Holdings shares could be in the buy zone
Part of the reason I’m looking at Qube Holdings shares is due to the coronavirus pandemic.
The shutdowns and border closures related to the pandemic in February and March hit the Qube share price hard.
In fact, the company’s shares went from a 52-week high to a 52-week low in the space of 2 months. In doing so, Qube’s value per share more than halved to just $1.64 per share.
While many S&P/ASX 200 Index (INDEXASX: XJO) constituents fell in that bear market, investors wear particularly bearish on logistics. There were concerns that supply chain disruptions would leave logistics providers like Qube without much business in 2020.
That hasn’t proven to be the case (so far). In fact, Qube Holdings shares have rocketed more than 50% higher since 23 March.
But I think looking at past growth just isn’t a wise strategy. In my mind, Qube has some huge growth potential as a disruptor in the logistics space.
I think Qube could be at the forefront of technological change and automation across Australia. That was highlighted to me by the group’s new warehouse automation project with Woolworths Group Ltd (ASX: WOW).
Woollies and Qube are set to spend at least $1.1 billion on the automated distribution centre in Sydney. Unfortunately, that means jobs are set to go at Woolworths. But what does it mean for Qube?
I think a strong execution on the Woollies facility could send Qube Holdings’ shares climbing higher in 2020. What’s more, it could be just the first of many automation projects that Qube gets involved in if it continues at its current pace.
No one knows what’s ahead for the economy or ASX shares in 2020. However, I like the look of Qube Holdings shares at their current price given what I see as strong growth prospects in the short to medium term.
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Returns as of 6th October 2020
Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Woolworths Limited. 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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