Looking for investment ideas

Looking For investment Ideas? Telefónica and ArcelorMittal Return To Eco10

The elEconomista index of Spanish securities is renewed with the return, a quarter later, of the airline and the teleco and the exchange between the two steel companies of the Ibex 35.

The current renewal of the Eco10 portfolio , the quality ideas index prepared by elEconomista with the collaboration of 51 analysis firms and calculated by Stoxx, is entrusted to the cycle, reinforces the tourism and telecommunications sector and continues to distance itself from the banking sector of facing the first quarter of 2021.

The more than fifty analysts and managers who build the indicator have decided to start next year ?? the current composition is valid for the months of December, January and February ?? with the return of Telefónica and IAG a quarter later and the change from ArcelorMittal to Acerinox .

They also leave the CIE Automotive indexand just three months after its premiere, Almirall . The teleco, the airline holding company and the Luxembourg steel company will become part of the orange portfolio on December 18 at the close of the session, the day on which the changes will be made effective.

In this way, the current composition of the selective is formed ?? following the weighting, from more to less, given by the experts ?? by the following ten companies: Inditex, Repsol, IAG, Telefónica, Cellnex, Grifols, Amadeus, ACS, ArcelorMittal and Iberdrola.

However, within the index its weight is balanced, with 10% for each of them. All the components of the selective are securities that are currently part of the Ibex 35 .

The new portfolio has an upward potential of 12% for the next 12 months, according to the market consensus collected by FactSet, an expected growth in profits of 46% between 2019 and 2023 and an expected dividend yield for 2021 close to at 4%.

Although the Eco10 has not been spared the impact of the coronavirus crisis and losses of 8% are recorded for the year as a whole, it beats the Ibex by 7 profitability points, which is 15% in the same period.

Likewise, the orange index has obtained a better performance since its creation. From June 16, 2006 to the last day of November, it was 41 points ahead of it, with a 15% return compared to the 26% that the Spanish index left in the same period.

The IAG ‘take off’
After the November rally , in which the Anglo-Spanish airline scored more than 60%, IAG is the only firm in the tourism and travel sector that has seen an improvement in the recommendation issued by analysts on its titles .

The recovery of the confidence of the travelers after the recent news about the vaccines of Pfizer , Moderna and AstraZeneca are the beginning of a light at the end of the tunnel as, predictably, the restrictions on travel will be lifted.

And, in this context, analysts seem to recognize that airlines have more room to price lost capacity, which will slowly recover, and IAG has returned to Eco10 in third position.

Leave a Reply

Your email address will not be published. Required fields are marked *