Is this FTSE 250 stock a market crash bargain?

first_img James J. McCombie | Friday, 10th April, 2020 | More on: NEX Is this FTSE 250 stock a market crash bargain? “This Stock Could Be Like Buying Amazon in 1997” Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. That update was undoubtedly reassuring for investors. But before we get to that, let’s remind ourselves of National Express’s recent history.Navigating a market crashThe financial crisis of 2007–08 and the recession that followed left National Express in a precarious position in 2009. Falling customer numbers exposed a weak balance sheet and poor businesses. The annual report for 2009 was littered with references to “normalised” numbers, an attempt to distract attention from the loss that was made.A new CEO took charge of National Express in early 2010. Underperforming businesses were shed, debt was slashed, the dividend was cut, and profitability restored. As a testament to the depth of the restructuring, 2009 revenues were only surpassed again in 2019.Now National Express faces another crisis. This time the CEO has prior experience of leading the company through a crisis and out the other side and has been at the helm for 10 years. However, experience counts for nothing unless it is acted on.Before 2009, National Express had operating margins in the low 6% range. It covered its interest expenses a little over twice with operating earnings and funded its assets with nearly four times as much debt as equity. The UK market was responsible for 63% of the company’s revenues, with smaller North American and European operations providing 16% and 20% respectively.In 2019, before this crisis hit, operating margins were in the upper 8% range. Interest expenses were covered three and a half times over by operating earnings, and total liabilities were a little under three-times total equity. The geographic revenue mix is also different now; the UK accounts for 22% of revenues, North America 45%, and Europe and North Africa make up 30%.Cheap return journeyBefore this crisis, National Express was in good shape. Nevertheless, the disruption to its services this time around is at least as bad as it was in 2009. This disruption, potential or increasingly real, drove the stock price down. National Express’s Covid-19 update reassured investors in three ways.First, there was a reminder that the company was in good financial shape and taking steps to cut costs. Second, a good chunk of the company’s contracts are being honoured partially or in full, and government support for employee costs is forthcoming. Third, in the first two months of the year, group revenue was up by 17%.The last point is important. National Express runs transit and school busses, intercity and international coach services, does charters and private hire, and puts on rail services. Revenue and profits had been growing steadily before the coronavirus hit, as had the stock price. Dividend yields averaged 3.7% over the last five years.I think National Express is a stock market crash bargain. We might not be out of the woods yet, but the company is in a good position to come through this crisis and prosper. Enter Your Email Address I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. James J. McCombie owns shares in National Express. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Our 6 ‘Best Buys Now’ Shares Shares in travel and tourism companies fared particularly poorly as markets tumbled. That is understandable. Measures intended to control the Covid-19 pandemic have stopped people moving around for work and leisure. Nevertheless, the sector is a good place to hunt for stock market crash bargains.National Express (LSE: NEX) is in the business of moving people around. By mid-March, its share price was down 81% for the year at 90.4p. Then the company issued a Covid-19 update and prices bounced back. Shares are changing hands for around 220p today.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential… Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! See all posts by James J. McCombie Simply click below to discover how you can take advantage of this. Image source: Getty Images last_img read more