Listed transport stocks have been stuck in the slow lane. Mobico’s (MCG) accounting fiasco and hefty debt overhang have soured investor sentiment, causing a share price slump, while Stagecoach and Go-Ahead have disappeared from the public markets in recent years after long periods of lacklustre returns.
Train and bus operator FirstGroup (FGP), one of the few listed UK transport plays left standing, has also had its share of drama over the years. Activist hedge fund Coast Capital blasted the board as “destructive” in 2019 and the group’s sale of its US student transport business in 2021 was carried out at what some shareholders viewed as a knockdown price in 2021.
FirstGroup bull points
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Strong balance sheet and regular buybacks
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Bus growth and adjacent services add resilience
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Open-access rail offers higher-margin upside