The search for refuge, also in equities, has become one of the main objectives of investors and more after the rise experienced by the European and American Stock Exchange in the first half of the year. However, the task is complicated and passes through values with good dividend, maximum quality and also expensive valuations. For Xavier Brun, responsible for European variable income of Trea AM, there is the alternative that passes by investing in securities that despite accumulating strong revaluation in the year and having a PER that reaches 30 times, are seen as a safe option. "The multiples of PER that are paid in companies in the food or consumer goods sector are at 10-year highs because there is no alternative," he stresses.
The surge in purchases that central banks have unleashed this year has been concentrated on sovereign debt, but has also spread to other assets. Public debt jumped to high-risk bonds and the current expands to the stock market, although to the safest securities. "The market tried to look in equities as close to bonds: assets of high quality and low volatility," says the expert of Trea AM. Companies such as Nestlé, L'Oréal or the luxury firm LVHM are some of the examples that best illustrate this trend. That is to say, solid companies with a strong internationalization of their businesses.
But as with any investment, there are also risks. For Brun, the main threat of the coming quarters is that the weakness registered in exports at the macroeconomic level, motivated by the protectionist boom, will be transferred to domestic demand through an increase in unemployment. For this reason, experts also advise diversification and not concentrate the entire portfolio on securities, which, even though they are very solid, can suffer a severe correction. "The problem is not the valuations if they maintain the current rates of growth, but before any contraction of the demand the corrections can be high and more now that China begins to show symptoms of slowdown", explains Lucas Maruri, manager of equities of Gesconsult. "We see opportunities in high-quality firms but we can not buy a company at any price," says the expert. Thus, the manager has in portfolio triple A values as EssilorLuxottica but also firms that have overcome the adversities but continue to quote at demolition prices as H & M.
The company resulting from the merger of the lens manufacturer (Essilor) and the sunglasses company (Luxottica) has a market share of 85%. Lucas Maruri, manager of European equities of Gesconsult, selects the value as one of its bets. Although quoted at very demanding multiples (a PER of 29 times), the expert is confident with his business and points out that in an environment of economic slowdown, his products will continue to be demanded. The company closed the first quarter with revenues of 4,210 million, 7.5% more than in 2018.
Its dominant position in the world of food is one of its main strengths. The Swiss firm, which rises 29% in the year and raises its PER up to 31 times, is well positioned to take advantage of the rise of the middle class in emerging countries such as China and Brazil. In the first quarter, the business in the South American country, its fourth most important market, became together with the US and the Asian giant in the group's engine. The profit rose by 3.4% and its turnover, 4.3%, to 22,200 million Swiss francs (about 19,500 million euros).
At the beginning of July, the cosmetics manufacturer registered its historic maximum, closing at 256.9 euros per share. The company, which is revalued by 23% so far in 2019, has a PER of 36 times, a few multiples that give vertigo, but are supported by the good performance of the business. Between January and March, L'Oréal achieved revenues of 5,930 million (5.1% more), surpassing the expectations of analysts thanks to the pull of demand in Asia, which boosted sales in emerging markets. 60% of the experts who follow the value advise to keep in portfolio.
The Dutch company treads hard and raises 30% in the year, exceeding 100 euros per share and raising the PER up to 30 times. Levels that are demanding but do not bother analysts. 42% of experts advise buying, 45% keep and only 13% choose to sell. Heineken closed the first quarter with a profit of 299 million, 15% more. Beer sales volume rose 4.4% to 52.7 million hectoliters, up 1.7% in Europe and 3.2% in the Americas, while in Eastern Europe and the Middle East rose more than 8%
Since April presented the accounts of the first quarter, has not stopped spraying maximum stock. With a revaluation so far this year of 48%, its shares are heading towards 400 euros. After closing 2018 with record sales of 42,000 million, between January and March the upward trend continued and its turnover (12,538 million) exceeded expectations thanks to its diversification. The drawback for Maruri is that after the intense rally, any small slip can accelerate the correction.
Goldman Sachs selects the Swiss firm as one of its preferred values. "We see Novartis entering a period of sustained revenue growth driven by a revitalized pharmaceutical business," he says. Among the catalysts highlights the approval by the FDA, the US agency of the drug, the drug Zolgensma. So far this year Novartis has registered 25% on the stock exchange and most experts who follow the value are divided between buying (56.7%) and selling (30%).
It rises 57% in stock market this year and its capitalization exceeds 100,000 million, favored by the crisis of its rival Boeing. Goldman analysts say that Airbus is moving from "performance-driven" profit growth to growth "driven by the product cycle." As the programs of the A320 and A350 models reach mature production rates, prices and costs per unit improve and margins increase. This change leads the experts to give it a potential of 20%.
Xavier Brun, head of European stock exchange at Trea AM, chooses Unilever as an example of solid value. The agrolimentary and cosmetics manufacturer scores close to 13% on the stock market in 2019 despite the fact that in the first quarter the company recorded sales of 12,400 million, 1.6% less than the same period of the previous year. This does not prevent the firm from maintaining its target for 2020 and expects the growth of underlying sales to be between 3% and 5%.
At Banco Sabadell, they are firmly committed to the company and believe that the growth of their sales has not been valued. The experts of the entity point out that Danone is trading at a discount of 7% compared to its historical average of the last five years, even though the expected growth rates are higher. Analysts also highlight its solid cash generation, which will allow it to be rapidly de-leveraged and "that in the absence of acquisitions, could be used to remunerate the shareholder".
The recent results of its clinical study on Alzheimer's have led the company this week to revalidate its highs and touch the 29 euros per share. Citi analysts note that strategic moves such as self-sufficiency achieved in the plasma division and the establishment of a strategic point of support in China "have made Grifols enjoy sustainable revenue growth". Although its PER reaches 34 times, 48% of analysts advised to buy and 40% to maintain.
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