23-Feb-2021:  As a logistics company, my take on Qube is that it's all about volume rather than high margins.  They can have a low ROE and low profit margins, however as the business grows it's a scale game, and all about winning more market share.  This business was set up by Chris Corrigan after he had set up Patrick Corporation and then engineered the 1998 Australian waterfront dispute, in which he attempted to sack the heavily unionised workforce and replace it with strikebreakers, eventually leading to reform and restructuring of dockyard labour practices.  In the 2007 miniseries Bastard Boys about the dispute, Corrigan was played by Geoff Morrell.  In 2007, Corrigan became non-executive chairman of companies associated with KFM Diversified Infrastructure and Logistics Fund which later became Qube Logistics.  The companies have bought into joint ventures in some of the stevedoring, wharf and shipping operations acquired by DP World when it took over P&O Transport Australia.  

This is an asset-heavy company that is improving its position in Australian logistics, particularly port logistics, with each passing year.  It is likely to receive some serious M&A attention at some point, similar to when formerly state-owned Japan Post paid a surprisingly high A$6.5 billion in 2015 for Toll Holdings, an Australian-based global transport company.  I'm not sure if FIRB would allow a foreign controlled company to take over a nationally important port logistics company like Qube, and even if FIRB was OK with it, it could still be blocked by our Australian Federal Treasurer (currently Josh Frydenberg) - just as then Fed Treasurer Joe Hockey blocked the attempted takeover of Graincorp (ASX:GNC) by Canadian giant Archer Daniels Midland (ADM) back in 2013 because he considered the sale was not in the "National Interest".  Foreign interests controlling our grain infrastructure and grain trading desks was indeed not in Australia's national interests, and the same argument could easily be made that foreign interests should also not control our wharf-side port logistics operations, even if it was only at a handful of ports.  Qube are involved in ship loading and unloading, container storage and other materials storage and logistics, and transportation, by road, rail and sea.  They have other strings to their bow also, but that's their main game.  Click here for a fact sheet on what they specialise in.

In summary, they certainly do not look cheap - they are not a bargain buy, but they are a solid transport infrastructure play with some M&A appeal.  They are on a PE of 48 according to Commsec, but then Graincorp (GNC) are on a PE of 47 and it's almost certain that nobody from outside of Australia can takeover GNC after what happened in 2013.  I'm reasonably confident that somebody will at least have a go at taking over Qube at some point.  Whether or not that deal ultimately goes through is another matter, but you can bet your ass the price of Qube is going higher if they receive a takeover offer, initially at least - while the offer still looks plausible.  And it won't have anything to do with their ROE or their PE, just about what they own and their position within their own industry.  It would be a strategic takeover (attempt), if and when it happens.

That said, it's not my type of investment.  I very rarely buy anything on the basis that I expect them to receive a takeover offer, unless I'd be happy to own them regardless.  I also don't like Corrigan at all, or what he did back in 1998 (see above).  I do note that Corrigan left Qube in June 2017 and is not a current substantial shareholder.  However I still think of it as a Corrigan company.  I feel it has his DNA in the way it operates.

Putting all that aside, they are not an income stock (the yield is very low) and they are not a fast growing company.  However, they are a steadily growing company.  Over the past 10 years, they have doubled their share price from $1.50 to $3, and their overall SP trajectory is bottom left to top right.  Most people would like to double their money in a little less time than 10 years, but for other people, or institutions, these sort of companies make ideal set-and-forget investments.  Super funds are just one example.

Looking at QUB's current substantial shareholders:

• Canada Pension Plan Investment Board, 8.38%
• Unisuper Limited, 5.41%
• Vanguard Group (ETFs), 5%
• Challenger Limited (annuities), 5%
• formerly, Perpetual Limited and Cooper Investors (both sold down or out in mid-2020)

Hopefully that gives you some idea of the types of insto's who see QUB as a viable investment - even at current levels.

[I do not hold QUB shares.]