I think AZJ looks interesting, it has been of favour and I don’t think it would take too much to see a rerating of the stock.

Across the infrastructure sector there are distinct differences between business models so it is hard to compare exactly directly.  That said some valuations gaps are too big.

SYD has received a solid rerating post bid and is now trading > 20x EV/EBITDA but I doubt travel recovers to anything like normal for a long time.  Telstra did a transaction for a half share of its tower business for > than 20x EV/EBITDA.

AZJ has struggled with volume and is out of favour for ESG reasons and trading on only 7x EV / EBITDA and paying a dividend  about 7 – 8%, 80% franked.  In reality only about 17% of revenues come from thermal (dirty) coal transport.  Although AZJ is probably an unlikely takeover candidate (I  imagine approvals could be challenging) I think in the strong M&A environment where infrastructure assets are attracting full bids can act as a catalyst to help AZJ could rerate, particularly as operating conditions improve.  AZJ won’t necessarily rerate to 20+ x but greater than 10x is very conceivable.

Technically, I like the look of the chart, possibly it has formed an inverse head and shoulders, a break out could see a solid move.

See attched charts.