Share tips: A classic counter-cyclical play

This transport operator stands to profit as more people save on the pennies by ditching their cars in favour of the train, says Paul Hill.

FirstGroup, the world's leading transport operator, carries some 2.5 billion passengers annually in Britain (54% of EBITDA) and North America (46%). This is a classic counter-cyclical play as thrifty households ditch their cars to save on fuel. Indeed, the Association of Train Operating Companies says 2011 was the busiest year on the railways since the 1920s. Meanwhile, the AA has calculated that drivers have cut their petrol consumption by 15% since the financial crisis hit.

In Britain, FirstGroup runs several regional bus companies and has roughly a 20% market share. It also operates five rail franchises: Great Western, ScotRail, TransPennine Express, First Hull and First Capital Connect. In the US it owns the Greyhound intercity coaches, the yellow school buses, and manages transport systems on behalf of metropolitan transit authorities.

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Paul gained a degree in electrical engineering and went on to qualify as a chartered management accountant. He has extensive corporate finance and investment experience and is a member of the Securities Institute.

Over the past 16 years Paul has held top-level financial management and M&A roles for blue-chip companies such as O2, GKN and Unilever. He is now director of his own capital investment and consultancy firm, PMH Capital Limited.

Paul is an expert at analysing companies in new, fast-growing markets, and is an extremely shrewd stock-picker.