Spanish stock market laggards that could beat the rally
There is no doubt that this will be a good year for most in the stock market. Also for variable income investors whose portfolio consists exclusively of Spanish securities. Ibex 35 itself has grown by almost 10% this year, even reaching a high not seen since 2015. And it’s not just the benchmark Selective Index that’s enjoying a sweet moment, with roughly 65% of the Continuous Market values being traded. positive in 2024.
Given this panorama, that investor who at the beginning of the year decided to be cautious and reduce exposure to the stock market, perhaps in order to provide the very high returns that fixed income was still providing then (despite the fact that it orchestrated a strong rebound in previous two years). months), while taking advantage of the projected appreciation in the value of this bond portfolio in the face of the inevitable rate cut, and reaping the benefits that stock markets have left in 2023, you might think that the time for getting into the stock market has already passed.
And he is probably right, but only partly, since not all listed companies participated in this particular race in the same way. It’s true that some stocks have experienced a real sprint, while others are in a competitive battle over the long haul. However, there are other players who have not yet taken the field and may consider themselves a good investment option if they take their toll relief.
This selection includes nine values that, regardless of what they have done in the stock market since the beginning of the year, They are currently trading at a discount to PER. (times earnings are reflected in share price) compared to early 2024 and get a purchase recommendation analysts, according to the FactSet algorithm. This Ence, Alba Financial Corporation, Tubacex, Grenergy, ArcelorMittal, Amadeus, CAF, Iberdrola and Repsol.
Raw materials cycle
This group of companies offering this small niche to the investor has one thing in common: raw materials. In fact, Ence is currently trading with the largest discount compared to the beginning of the year in terms of PER, which is now requires a 15x multiplier up from more than 60 on January 1. And this despite the fact that their titles have risen in price by more than 20%.
What’s happening with the paper maker is that it is in the process of recovering from a season of low material prices that has weighed heavily on its bills. Pulp is now recovering again and forecasts suggest it will continue to do so in the coming months and years until it exceeds all-time highs thanks to recovering demand in China and curbing capacity growth, as well as lower costs due to normalizing energy prices. Ence is a clear beneficiary and now receives the best recommendation in the last three years.
ArcelorMittal also figures at a discount, which in this case has accumulated losses of about 8% this year, which explains that someone who enters the steel company now will be able to do so for almost 7% cheaper than then. “We could see improved results in the second quarter of the year, driven by higher prices in North America, recovering volumes in Brazil and lower costs in Europe,” Renta 4 said.
Grenergy and Iberdrola are options for those looking to bet on the continuity of the recovery of the utilities sector in general and renewable energy in particular. tall guyscombined with low energy prices They weigh down these values, which have lost 17% this year in the former and barely reached 1% in the latter, with both now offering lower earnings multiples than at the start of the year.
In Repsol’s case, it is benefiting from an oil bull market where Crude oil price has already risen by almost 10% in 2024. This reinforces the point that while Repsol shares are also up by double digits this year, the multiples required to do so are essentially the same as in January. This year, the oil company will try to match the record profits it made in 2022.
Also related to the industrial sector, in this case the Basque sector, CAF and Tubacex appear on this list. The train manufacturer offers potential more than 35% to its target price, and at lower multiples than those it had in 2022 and 2023. some projects, but keeps its fundamentals intact, and the buy recommendation is supported by all the analysts who follow it.
Rounding out the nine securities in March were investment holdings Corporación Financiera Alba and Amadeus, both of which have seen negative stock market performance this year. Firstly, its stock market potential stands out significantly, with analysts forecasting it to rise over 60% from current levels, while the key for Amadeus is to see if it finally recovers this year to levels. existing before the pandemic.