Taking advantage of moments of weakness to seek new paths is a mantra that has only gained strength in the current exercise. The sequence of setbacks that the markets have been having to digest since January 1 also leaves opportunities unseen for years. The Ibex is, concretely, a good reflection of this, since the national index is now bought up to 42% cheaper than the average of the last decade and 35% below the average of the 21st century.
This can be seen through its PER ratio (times the profit is included in the share price), with a current multiplier of 10.3 times, according to expert consensus data collected by FactSet, compared to 18.1 times of the decade and 15.5 of the last 20 years.
And it is that, despite the fact that the Spanish reference has shown greater strength than its continental counterparts so far in 2022 -and yesterday it broke the second positive streak more long this century –, also succumbs to negative terrain, with -3.2% in 2022.
A fall that, however, has not translated into a snip in the estimate of earnings, with EPS (earnings per share) 17.8% higher than at the beginning of the year, going from the 689 euros estimated at the beginning of the exercise to the current 812 euros. Figures that place it as the second European index, only behind the French Cac, with the highest EPS growth in 2022.
But this is not the only credential with which the Spanish reference rises with respect to the rest of the continental indices. The Ibex is also the European thermometer that is cheaper compared to its average of the last two decades, with a difference of almost 10 points with the second place, which is occupied by the London Ftse 100, whose ratio is reduced by 33% compared to its average for the decade, with a current PER of 10.1 times compared to 15 times in the last 10 years.
Thus, the London Stock Exchange is also the only one that has a more affordable multiplier than the 35 club, according to data from FactSet. The French Cac, for its part, offers a PER of 11.7 times; the German Dax is bought at 11.6 times; the EuroStoxx at 11.6 times and the Stoxx 600 at 12.8 times.
If we cross the pond, we will not find more attractive prices than the one offered by the Ibex, with the S&P 500, the main American index, with a ratio of 19.2 times and slightly more expensive than the average of recent years, of 18.2 times.
By values, ten Ibex companies currently offer prices of less than 10 times. And it is that, as progress was made, among the different surprises that a very particular year is leaving are the accounts of many of the firms in the index, which against all odds are being able to overcome the potholes of the year and save their profits. This can be seen in 51% of the companies in the Spanish index, which register an increase in profit forecasts for this year, according to the data collected by FactSet.
This panorama, added to the falls recorded by many of these companies on the floor, leaves a dozen stocks trading at historical multipliers, since, of these ten, eight offer multipliers lower than the average for the decade.
The two selective steel companies are the cheapest, at levels not seen before in any of the cases. ArcelorMittal leads this list, trading at an astonishing 1.9x P/E ratio by 2022 and buying up to 8x cheaper than its 10-year average.
For its part, Acerinox, like its counterpart, has the cheapest price in the last decade, in addition to offering a 60% upward potential, that is, the highest in the Spanish index. In this sense, Diego Morín, an analyst at IG, explains “that despite having significant revaluation potential and, above all, profits that will continue to be positive, the growth projections for the economy at a global level are not at all encouraging for the sector , since it is possible that we continue moving with high inflation.
We cannot forget the Asian giant, since if the economic activity of China slows down, it could end up affecting the industrial sector and consequently, the steel companies.”
Repsol is next, with a PER of 3.3 times. The successful path that the oil company marks on the stock market and the historical record of operating profit that is expected for this year harbor the explanation for its surprising price reduction.
The five Ibex banking entities are also part of this list. It must be remembered that the environment plays in its favor after the rise in interest rates that the ECB will carry out in an attempt to control inflation. And this has been seen in its performance on the stock market in the month. Indra and Mapfre complete the classification of the cheapest companies, despite the fact that these had registered such attractive multipliers before, in 2021.