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The best and worst of the year in the Ibex-35

The best and worst of the year in the Ibex-35


The massive stock market falls of 2018 at this time did not bode well for the year that is now ending. But equity has ended up having a magnificent 2019.

Although with ups and downs. And with inequalities. Because in a favorable general context, the Ibex-35 has lagged a little behind, with profits of around 13%, far from those of around 25% of many of the great indicators of the Old Continent or Wall Street. But having invested in Spanish stocks has not been synonymous with having made profits. 

At least a dozen companies of the selective are in losses in the absence of a session and a half to end the stock market year. Among all, the worst is the Ence bin, which drops 32% in the year. 

And that, as Aitor Méndez, of IG, started the exercise on the right foot: premiering at the Ibex-35 instead of Dia and closing January with a revaluation of more than 20%, up to 7 euros per share (after a very bad final stretch of 2018 after having marked historical highs in October at 9 euros). 

Ence’s Falls

After the January rally, the suffering began. This, according to Jesús de Blas, of Bankoa Crédit Agricole, due, in part, to external issues: it belongs to a cyclical sector and cyclical values ​​have not been very much to the taste of investors this year in which economic growth has been in question. 

To this we must add the fall of cellulose, its raw material, which attacks the waterline of your business, since it depends on 60% of its sale: «The accumulation of inventories that has occurred in the main country consumer of eucalyptus pulp, which is China, has caused the price to fall due to the excess supply that the market cannot absorb, ”says Begoña Alcalde, of Intermoney Valores SV 

The third problem with which he has had to deal with has been the risk even in the air of loss of the concession of the Pontevedra plant, responsible for half of its production. Although there are analysts who believe that a possible closure of that center would already be included in the price of the shares, given the size of its fall and that the company has prioritized its investments in its Asturian plant in Navia, uncertainty can continue to penalize its stock market evolution. 

Jesús de Blas believes that, unless the company finally gets an extension for its concession, it will cost him to recover on the stock market. This analyst points out that it may take several years to return to historical highs. Even if the price of cellulose goes back. “You need a very good evolution of your business to try to compensate for the loss of the Pontevedra plant,” says de Blas. 

Roberto Moro, from Apta Negocios, describes that the technical analysis shows first good symptoms: the sequence of decreasing highs and lows has already been broken. “It is the first stone to affirm that something can begin to change,” he says. 

In addition, he points out that he can give more positive signals, reaching 3.8 or 4 euros, but considers that the rebound will not be safe until it exceeds 4.2 euros, a level with which he has collided several times this year. Also, be careful if you fall below 3.40 euros. 

The fundamental analysis seems to give more room to optimism: of the fourteen analysts that are part of the consensus, eleven advise buying. And as a whole they give an average potential of 23%. And if that is fulfilled that the worst values ​​of a year become the best of the following year?

Cellnex high

On the opposite side of the table is the operator of cell towers Cellnex, which has almost doubled its market capitalization in the last twelve months. Some analysts find this extraordinary behavior striking, considering that the telecommunications sector has had a fairly mediocre evolution this year. 

In fact, with its last strong rise, Cellnex capitalizes almost 15,000 million euros, more than Telecom Italia (12,000 million) or KPN (11,000 million). But it is that the segment of the towers is fashionable on the stock market and competitors of Cellnex also rise this year.

Jesús de Blas explains that what has favored the promotions of the Spanish company has been the confidence that its continuous gain in critical mass (its periodic acquisitions of telephone towers in a growing number of European countries) will translate into increases in its income. 

Hence, regardless of the financing channels you have chosen to make your purchases, whether it has been with capital increases or with debt, the market has rewarded them. Because, as the Barclays analysis team values, “Cellnex continues to execute its accumulation strategy with continued success.”

According to Aitor Méndez, his ambitious international expansion plans and the role he will play in the implementation of 5G technology explain that he has been positioned as the undisputed winner of this year.

Analysts expect large telephony operators to continue detaching themselves from their towers. And the company says it is analyzing between 4,000 and 5,000 million euros in assets. It is likely that it will continue with its purchasing operations in 2020.

And it could finance them with more debt or, more likely, with capital increases. What worries is not that, since it is its growth path. De Blas says that the real risk involved in this action is that it does not meet the expectations of income and benefits. 

Despite its brilliant rise (when it started its journey on the stock market, in 2015, it capitalized 3.5 billion euros), most of the analysts who follow it (fifteen of 26) advise buying. Although they give a potential of just 3% up to their target price. 

Roberto Moro believes that while the investor who already has it in the portfolio could keep it, whoever is outside, should remain on the sidelines. This is because now it is at levels that give few clues about the direction it can take: right on the equator between 36 and 40 euros per share. In his opinion, below the first level, his aspect of the medium term would deteriorate and below the 33, that of the long term. It would give you much more security that exceeded 40 or 42 euros.

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