Spain and Portugal have shown that they share much more than a peninsula in recent days and despite the little monitoring that is generally done here of the Portuguese market, this is neither much less foreign to a large part of the investors and national managers, who find some interesting securities in the neighboring country with which to complete their portfolios.
Proof of this growing interest in this market is that the benchmark index there, the PSI 20 (which includes the 15 largest firms in the country) is trading at highs not seen since 2015 after these first three months of the year, and despite the conjuncture of inflation and war, has scored about 7%, being the second most bullish in Europe only surpassed by the Norwegian since the first of January.
Gonzalo Sánchez, director of investments at Gesconsult and Iberia equity manager, explains that Portugal “is a very small and quite illiquid market, with a lot of weight from a few sectors such as electricity and raw materials and that is why it is better go value by value to analyze it, because there are interesting stories”. For Javier Ruiz, director of investments at Horos, “It is a market that has always been attractive because we have been able to find companies with family shareholders, aligned with the rest of the shareholders, generally well managed and at very attractive prices”.
Among the 15 companies that make up the selective we find utilities such as Greenvolt and EDP (and its renewables subsidiary), oil companies such as Galp, paper manufacturers such as Altri, Semapa and its subsidiary Navigator, consumer goods such as Jeronimo Martins or the cork company Corticeira Amorim , among other. Of these 15, eight receive a purchase recommendation by the consensus of analysts collected by FactSet while only one, Redes Energeticas Nacionais, carries a sell advice.
One of the favorites for the manager of Gesconsult is Navigator, “European leader in its sector with the highest margins and controlled costs, at a time when paper prices are going to remain high”. Its parent company is Semapa, which is listed at a discount and is one of Horos’s investment ideas: “It seems to us the best way to have exposure to Navigator, from which it receives very attractive dividends, without forgetting that there has already been some bid attempt, although at prices far removed from the appropriate one,” says Ruiz, who also highlights Sonae as one of his favourites: “The new management has meant a before and after, reducing the less profitable lines of business.”
Managers who bet on Portugal
The neighboring country does not go unnoticed by the most renowned value managers and some of the Portuguese companies are part of the portfolio of your stock funds Spanish for a long time, to the point that in some companies they monopolize an important part of its shareholding.
Among the 34 funds that make up the League of active management of elEconomista, the average exposure to Portuguese companies is 7.5%, but there are ten investment vehicles in which the 10% is widely exceeded. And in the case of Magallanes Iberian Equity M, Azvalor Iberia, Bestinver Bolsa, Cobas Iberia C and Dux Iberian Value, this percentage is even higher than 20% (see graph). The fund with the greatest exposure in its portfolio to Portuguese companies is the one managed by Iván Martín, which has up to 26%, according to the latest data from Morningstar, followed by the Álvaro Guzmán and Fernando Bernad fund, with 23.5%, and the one managed by Ricardo Seixas, in the investment firm owned by Acciona, with 21.79% and Francisco García Paramés, with 20.65%.
Companies such as Semapa, Ibersol or Correios de Portugal (CTT) are the names that are repeated the most in value funds, and are usually found among the main positions. In Magallanes Iberian Equity, for example, Semapa and CTT are in second and fifth place with a weight of 5.5% and 4.5%respectively, while in Azvalor Iberia the oil company Galp (8.5%) and the paper manufacturer Altri (4.9%) are the preferred Portuguese investment ideas.
In the case of Bestinver, it so happens that Seixas is Portuguese and that he has up to six companies in the portfolio of his Spanish stock market fund: the distribution firms Ibersol (5.1%) and Jeronimo Martins (4.7%) are among the top ten positions, but CTT, Galp, Semapa and EDP Renovaveis also appear. The fund managed by Paramés, for its part, has a greater weight in Semapa and also has Ibersol (4%), Galp (3.2%), CTT (2.3%) and Sonaecom (0.97%), the subsidiary of the Sonae group dedicated to software, systems, telecommunications and media.
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