The Eco30 Portfolio was born with a very simple objective, to double each euro invested each decade, at an annualized rate of 7%. Six years later, the fund advised by elEconomista.es, Eco30 Braided Walletreached 7.64% annualizedwhich leaves its initial profitability at 55%. In life, in journalism and in finance, the only truth is the facts. Check here the portal with all the updated information on Eco30.
Tressis Eco30 Portfolio is a systematic selection, by fundamentals, of quality international securities with the idea of building a portfolio that manages to double assets every decade. The fund is based on a balanced selectionin which no sector can have more than four representatives, who together offer attractive growth rates, purchased at profits and valuation multipliers well below the market average. This is in no way a matter of buying simply cheap securities: The goal is to try to incorporate attractive stories, with catalysts, at reasonable prices and with reasonable debt levels.
To achieve a profitability of 7%, the fund builds different security shields. The first layer consists of the fact that today in the portfolio which advises elEconomista.es in the investment fund Eco30 Braided Walletbenefits purchased at current prices generate an expected annualized profitability for the years to come of more than 9%. Percentage to which must be added the collection of dividends in the portfolio with an average yield close to 4%. The sum of the inverse of the PER (times where the profit is reflected in the share price) plus the annual remuneration represents an expected annual profitability of 13%, almost double the targeted objective. Check out all the platforms where you can contract our fund.
The average PER of the securities that make up the Eco30 Portfolio for the next year is 11.46 times, and for the following year it is reduced to 10.26. The ratio is significantly lower than that of major international indices. A profit multiplier of 20.75 times is paid for the S&P; for the Stoxx600, 1:48 p.m.; for the Nikkei, 6:75 p.m.; or for CSI 300, 12.98.
Half of the portfolio is purchased at a price that, in a decade, would only recoup the investment with its current profit. And only four growing companies (Encompass Health, Hitachi, Marvell Technology and Quanta Services) pay a PE greater than 20 times. A very demanding multiple but with the improvement in expected profit, around 50% for the next two years, it reduces the profit multiplier to more than reasonable ratios.
Concerning the dividend, The thirty securities that make up the portfolio generate an average return of 3.75%knowing that a large group does not pay anything or less than 1.5%. Conversely, Stellantis, Ayvens, British American Tobacco, Engie, Forvia, UniCredit, AXA, Enel, Eiffage and Teleperformance pay dividends of between 5% and 11%. View the dividend schedule here.
Another layer of security of the Eco30 wallet is that Average debt is almost a third lower than that of major international indices. There is indeed a large group of companies that are not even in debt and have excess cash. In the case of Stellantis, the cash represents 45% of the value at which it is quoted on the market; in PDD (the Temu matrix) a third part; at Samsung, 27%; and at Airbus, 12%. Three other companies are expected to be debt free by 2026: BYD Electronic, Hitachi and Micron Technology.
Another element on which the Eco30 Portfolio’s search for value converges is that companies are purchased at reasonable prices in relation to the value of their assets. The average of the entire portfolio is bought at 1.8 times and the median between 1.3 and 1.4 times. Companies like Eurazeo, ArcelorMittal, Forvia, Stellantis, Ayvens, Civitas Resources, UniCredit and Samsung Electronics are trading below their book value.
Achieving high margins on sales is another level of security that the portfolio imposes in selecting its composition. Taking into account that one of the most important elements in the preparation of Eco30 is that no sector can have more than four representatives in its portfolio, in order to avoid excessive coordination based on sectoral preferences at one given moment, The average of the companies that make it up achieves an Ebit margin of 20%. Even companies like Eurazeo, Golar, UniCredit, BAT, SS&C Technologies, Marvell, Civitas, Micron Technology, PDD convert 30% of what they charge into earnings before interest and taxes.
Return on invested capital is another of the pillars on which the Eco30 portfolio is based. On average, the thirty companies that make it up achieve an ROE of 15%, but some companies like PDD, Marathon Petroleum, Airbus or Equitable reach 20%.
Another of the pillars that tries to balance the portfolio as a safety cushion to achieve the objective of 7% annualized is that the free cash flow yield, The percentage growth in a company’s cash flow after completing all of its planned operations relative to its market value averages about 10% among the thirty components. In portfolio companies such as Forvia, Civitas Resources, Teleperformance, Stellantis, Eurazeo and Eiffage, this percentage exceeds 15%.
Of course, EV/ebitda, one of the most classic valuation formulas for a company, is another of the instruments used in portfolio preparation. Here, the average portfolio figure doesn’t matter to me due to the diversity of portfolio companies, but only four companies pay more than 12 times (Hitachi, Quanta Services, Marvell and Ayvens). On the contrary, in companies like Stellantis, Civitas Resources, Forvia, Equitable, Samsung and ArcelorMittal, they are paid less than 4 times. A takeover bid cannot be ruled out in certain companies listed at such low EV/Ebitda ratios, as has already happened in the past in the Eco30.
