Investors and analysts often disagree on their view of the market. This explains why some companies have unjustifiably lagged behind in a year that has been very positive for the stock market, at least if one looks at the behavior of the reference indices. There are experts who even consider that it is possible to speak of unfairly treated values.
Colonial, for example, trades at a discount on the value of its assets that can be around 40% and for Gonzalo Sánchez, Gesconsult’s investment director, that would not make much sense. “He is quoting as if we were all going to work from home, when teleworking is ending. Not even at the top of teleworking did he have unemployment in his assets. This is now 1% in France and 3% in Spain. And They are also assets located on the first line of everything, absolutely prime, so they will always be in demand. The maturity structure of your debt is not a problem, with everything at a fixed interest rate,” he explains.
Perception would be counting more than reality in this and other cases. Hence, Colonial and the real estate sector in general may have to wait until 2024 for their favorable moment on the stock market, when interest rate cuts begin to be seen and investors let their guard down with growth values. Something that, paradoxically, is not affecting the technology sectors this year.
Solaria, the red lantern of the Ibex in 2023 with losses close to 20%, also seems to suffer a disproportionate penalty. It is true that instability “has been surrounding” the sector both from a regulatory point of view and due to an alleged excess capacity, acknowledges Toni Cárdenas, manager of Caja Ingenieros. But investors would be getting out of hand with many of the renewable companies, says Sánchez. “It is enough to look at the PPAs (long-term purchase and sale agreements) that companies are closing are in the area of 40-50 euros / Mwh, when before they were at 30-35 euros / Mwh” he argues.
José Miguel Fernández, an analyst at Beka Finance, is struck by the unfavorable differential between Logista and the Ibex so far this year: it rises by barely 1% compared to a rise of almost 15% for the index, which supposes a “relative fall” of 7%. He believes that the market is not adequately valuing either the attractive shareholder remuneration (an estimated 7.5% dividend yield for 2024) or the returns on capital generated around 19%, which have been very stable in recent years. .
Several pharmaceutical or health-related companies are among the values that would be excessively punished, according to experts. Víctor Álvarez, head of equities at Tressis, points to Laboratorios Rovi. He is confident that the possible approval of Risperidone ISM by the FDA could give a boost to a price that has been somewhat depressed in recent months in a company with a perfectly diversified business. Rovi is trading at more than 75% of its December 2021 record level.
For Cárdenas, two clear cases of heavily penalized stocks are Almirall and Grifols. The first is weighed down by the continuous changes in management and the capital increase to strengthen its liquidity and finance an acquisition, he explains. However, Almirall has a strong focus on growth in the dermatology area in the long term. In the blood derivatives manufacturer, the market would be missing concrete actions within the company’s debt reduction process. “Precise actions in this area will restore investor confidence, ensuring better financial performance for the company and credibility in its forecasts,” says Cárdenas.
Some European pharmaceuticals are also among the companies with the potential to make up a lot of ground lost for no apparent reason. In Dunas Capital they emphasize that Sanofi and Roche could bring value “even in a recessive scenario”. Cárdenas underlines Roche’s ability to improve in the medium term the slowdown in earnings per share growth that has been seen in recent quarters and that would be excessively penalizing its shares.
Álvarez focuses on the French Teleperformance, which loses more than 30% in 2023. “The market does not fully see the role of the French group in the transition towards a world where artificial intelligence is gaining prominence. This, together with the acquisition of one of its rivals (Majorel), has generated a bearish maelstrom that has little or nothing to do with the operation of the business,” he says. He believes that as a key player in the business services sector, Teleperformance will be able to integrate new technologies into its processes, just as it has been doing for the last 20 years. “What’s more, the company itself foresees that artificial intelligence will allow them considerable cost savings that will help them increase their margins and, therefore, their earnings per share,” he remarks.
The fall of more than 12% in 2023 represents a good buying opportunity in Imperial Brands, a company with extensive competitive advantages based on intangible assets in the tobacco business, according to Fernández. “Strong government regulations have made the barriers to entry almost insurmountable and have kept market shares in the core fuels business stable,” he explains. He also believes that Nestlé should cut the gap that separates it from the average performance of the market: its shares are practically flat against an average advance of around 10%. “Their position in the global market is hard for new entrants to match,” he says.
