There's one sector that's springing back to life from the COVID-19 pandemic – and no it isn't residential property.
Sales volumes for homes may be on the increase, but that doesn't constitute a recovery as prices can (and are likely) to fall even as the number of transactions grow.
This is because turnover is primarily driven by first home buyers, and this segment alone cannot do the heavy lifting as local and international investors flee the market.
If there is one group of shares on the S&P/ASX 200 Index (Index:^AXJO) that will experience the much-touted but elusive V-shape recovery, it's transport, according to the analysts at Macquarie Group Ltd (ASX: MQG).
Revving for V-day
This rebound is happening happening right before our eyes. The traffic around the local streets around my neighbourhood have been steadily increasing over the past few weeks – even before the lockdown restrictions were eased.
We won't need to wait for Transurban Group (ASX: TCL) to provide its quarterly traffic update before getting excited.
Private cars vs. public transport
Macquarie believes that commuters would much prefer the safety of driving their own cars than to risk catching coronavirus on public transport. This includes flying on the likes of Qantas Airways Limited (ASX: QAN).
"A change in car use behaviour could be a tailwind for car sales," said the broker.
"There is no recovery in official data yet. But Google Searches for new and used cars have risen rapidly in recent weeks and this could signal material pent-up demand for new and used car dealers."
This will be great news for auto dealership group AP Eagers Ltd (ASX: APE), which was already battling slumping car sales well before we even named the dreaded pandemic.
Hertz crashes recovery party
However, the collapse of the car rental industry, which sent Hertz Global Holdings Inc scurrying into bankruptcy protection, may be a new headwind.
Hertz is likely to be forced to sell most of its automobiles to raise much needed cash, according to CNN. It's rivals like Avis Budget Group Inc. may be better placed financially, but they too could be forced to downsize their fleet.
The report was focused on the US market but a similar trend could emerge here where relatively new vehicles are put on the market at discount prices. That won't be good news for new or used car dealers.
ASX shares best placed to benefit
Macquarie's analysis didn't dwell on the impact of the car rental market, but it coincidentally picked three transport-linked stocks to buy that aren't car dealers.
These stocks won't be impacted by rental car liquidations, and may even benefit!
These are aftermarket auto parts group Bapcor Ltd (ASX: BAP), online car classifieds group Carsales.Com Ltd (ASX: CAR) and Transurban.
