The widespread collapse of the bags is leaving unusual listing ratios for many stocks. And not only in banking. Beyond this sector, ArcelorMittal, Merlin and Repsol are heading these first measures of the coronavirus crisis with discounts of 50% or more on its book value.
Although the stock market punishment is increasingly bulky and generalized, the price with discounts on the book value is far from being the dominant trend in the Spanish stock market. In this sense, the listed companies of the Ibex 35 give an average valuation of twice what their accounting books mark.
A total of 19 companies in the king index of the Spanish stock market are listed with surcharge In these terms, while only 15 companies do it at a discount, which is still an unusual number.
The ‘sales’ in ArcelorMittal they reach 72% of the book value of the metallurgical company. The company based in Luxembourg and listed in several European parks is suffering a 45% cut for its listing so far this year, but the bulk of analysts who follow its evolution recommend buying his actions.
With a bullish potential of 54% up to 13.31 euros per share that marks the consensus of Refinitiv analysts, the investment opportunity seems clear. However, the most recent value reports recall that the agility and solvency with which the coronavirus crisis can be avoided It will have a clear impact on the evolution of your business, marked by the productive pace of the industry, especially infrastructure.
In favor of the upside potential of ArcelorMittal, the initiatives it has recently launched to have greater maneuverability in front of what may be to come. From the decision to cut dividends to have more liquidity in your safe, to ERTE that the company has been establishing in the different markets in which it operates, going through a capital increase that seems to have attracted BlackRock’s attention.
The second ‘bargain’ of the group is Merlin Properties. In a list in which the banks have the singing voice with the recent sinking to historical lows of several of its representatives, the socimi it is quoted at half its book value. It so happens that, like the steelmaker, it also accumulates a 45% decrease in its price so far in a year in which the Ibex 35 accumulates decreases of 30%.
The listed also has a recommendation to buy and has a 60% consensus upside potential. However, Merlin Properties listing ballasts include deferral of dividends, the rental forgiveness imposed by the Government, the slowdown in the development activity and the uncertainty about the closest evolution of the price of real estate.
This last point will largely depend on what the final impact of this crisis is on the purchasing power of the Spanish. This is why forecasts around this factor become key to deciding whether the company’s discount is more of an opportunity or a trap, although today the investment community opts for the former.
Black gold loses luster
The shortlist is completed with RepsolAdding to the economic threats suffered by her colleagues on the Ibex is the sharp drop in prices suffered by oil, its raw materials and the basis of its business. Although the company has diversified its activity and it has its balance well shielded against the swings of crude oilThe constant fear of an overabundance of barrels encouraged by the renewable transition programs has led the listed company to this situation.
The discount in the oil company on the value that their accounting books mark is 48%. It is a percentage far superior to that of companies such as IAG (30%) and Meliá Hotels (34%), which have a much more complicated business recovery ahead of them and, furthermore, have suffered much greater setbacks so far this 2020. Specifically, Repsol lost 37% compared to 69% for the airline group and 56% of the hotelier.
With a revaluation potential of 36% -up to 11.87 euros per share-, the bulk of analysts who follow their evolution on the stock market advise the purchase of their shares. No less than 24 of the 33 experts that make up the Refinitiv consensus for value. Of the remaining nine, six advise holding positions in their capital, while only three choose to undo them.
Banking up front
In the financial sector, Banco Sabadell takes the palm of the discount, when listing 88% below its book value. However, his business prospects and solo continuity are also weaker than most of his peers.
Bankia (81%), Santander (69%), BBVA (65%) and CaixaBank (62%) are next in the Ibex 35 ranking. Bankinter (33%) and Mapfre (43%) move at prices much closer to what their accounting marks.