Bestinver Securities, the investment banking sector of the manager but independent of it, selects the seven Spanish companies in which it considers the right time to take a position in its catalogue of high conviction ideas for September 2024. The selected ones are: Acerinox, ACS, Allfunds, Cellnex, Endesa, Rovi and Viscofan, with a strong buy recommendation in all seven cases.
For the steel company, they forecast a dividend yield of 6.6% for this year. “We expect Acerinox’s earnings momentum to improve in the coming quarters, while the company has several options to increase the stock price (for example, a buyback is planned, and it recently bought Haynes in the United States, which makes the future spin-off of its HPA business more likely),” the company says.
ACS’s price should also be supported “by increasing global infrastructure spending, mainly in the United States, and its concessions business should benefit from stable cash flows through Abertis and new concessions in the future,” they argue at Bestinver Securities.
The company continues to see “strong long-term value” in Allfunds and is confident in the recovery of the business “now that existing client flows are back to positive, particularly as the management team continues to see encouraging trends in flows since inception,” they point out.
Cellnex highlights “its new orientation towards FCF generation and shareholder remuneration”. In addition, they believe that the possibility of being the subject of a takeover bid is high.
Endesa is also among the companies selected for being well positioned to benefit from the growing investment needs arising from the energy transition. “The valuation is attractive, as Endesa shares are trading at a 25% discount to their peers,” they add. At Rovi, they highlight the current share price as a good entry opportunity, as well as the strong increase in profits they expect in the second half of the year.
For Viscofan, “an improvement in earnings is expected, as demand would show clear signs of sequential recovery in the second half of the year,” they explain in the report. They also point out that its solid EV/EBITDA gives it ample room to continue improving its shareholder remuneration policy.
