MT Tracker 1 May 2013

Last week the MT Tracker took a break as it was judging the MT Awards - but what a difference a week makes. Rentokil finally sold City Link, to investment house Better Capital. This does make a big difference to the MT Tracker as Rentokil's size, in comparison to every other listed transport firm, was distorting the results of the Tracker. Excluding Rentokil gives us a much truer picture of investor sentiment in the sector.

You can read our initial thoughts on the sale of City Link in The Hub but it is fair to say that investors were waiting for Rentokil to divest it for some time. A division that was struggling to turn a profit was always taking the shine off the rest of the business.

Excluding Rentokil's share price from our basket of transport shares shaves anything between 95-100 pence off the basket. The new one looks a little bit like this, with Hargreaves and UK Mail the better performing shares.

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Where Rentokil's exclusion makes a massive difference is in market capitalisation. It was adding an average of £1.7bn to the basket. In the main transport market caps are small: Stobart is now the largest with a market cap of £293m. As a result of the divestment of City Link there is a much clearer picture of road transport's size in the public markets.

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Of course we'll have to change the Tracker again when Royal Mail float...