The rebound in equities in Spain was around 19% in five trading sessions. But by no means does it mean that the downtrend has stopped, or even that it has formed a more or less reliable soil. If not, on the contrary, it is just that, a rebound although very striking that is in line with the sharp falls in financial markets around the world. From this point of view, it will not be surprising that sooner or later the stock indices do not surprise again with a new downward pull that could take the Ibex 35 to levels very close to 5.000 points.
Therefore, if positions are to be taken in national equity markets, it is time to be more selective than ever in the selection of securities that will integrate our investment portfolio from now on. Not in vain, we will no longer be worth all the listed ones, but only those that may have a better performance in the evolution of the stock market during these historic days that financial markets are experiencing. To facilitate the decision by small and medium investors, we are going to offer a short list of the values where it should not be so delicate for the world of money at this time.
In some cases, due to its high indebtedness and in others because they present a very deteriorated technical aspect that does not exactly invite taking positions, no matter how low their current valuation in the equity markets. In this sense, we will have no choice but to park them due to the high risk that their positions entail from all points of view. For which we are going to offer some other clue about the positions that should be avoided at all costs in the current situation offered by the money sector and that is not the most conducive to being in its movements.
Values to avoid: Banco Sabadell
Their low prices may appear to be inviting to take positions at current levels. But of course that is not so. Not much less. Because it is a value that has broken all the possible supports that it had ahead and something else. Until you are below 0,50 euros for each share, when a few months ago we had it in the double euro. Sure it can bounce, just as it is doing these days, but what is clear is that its trend is clearly bearish. And what is worse, at all terms of permanence: short, medium and term. In other words, you have few resources to make your savings profitable from now on.
While on the other hand, it cannot be forgotten that it is the credit institution that has had the worst performance in the last two years. You have noticed excessively the state of interest rates that are in negative territory, at historical lows and that is having an impact on your line of business. Not surprisingly, these are not times for the banking sector in general and much less in this particular value. In a context where the investor has more to lose than gain from taking positions at current price levels. Although they may initiate precisely the opposite. It is better to think of other options that may be more profitable in the current circumstances in the equity markets.
IAG may even disappear
The sector that is going to lag the most in economic recovery is undoubtedly the one linked to tourist activity and among them this airline cannot come out of the economic recession very well. Can't forget that has lost almost 70% of its rating in the stock market going from almost 8 euros to less than 2 euros. But the worst thing is that this company can be chopped up and a nationalization in the Spanish division cannot be ruled out. To the point that it can generate new negative surprises for small and medium investors in the coming months. Its behavior has exceeded all the negative elements that could be expected from this stock market value.
In this sense, the rapid spread of COVID-19 and the government warnings and travel restrictions associated with it, are having a significant and increasingly negative impact on global air traffic demand on almost all routes operated by airlines. from IAG. To date, IAG has suspended its flights to China, reduced capacity on the routes to Asia, canceled all its operations to, from and within Italy, in addition to making various adjustments to our network. Being one of the values most punished in the selective index of the variable income of our country, the Ibex 35.
Arcelor as a cyclical value
These are not times to be in the values denominated as cyclical and this steelmaker is one of the most representative options in the sector. That is to say, in recessive periods they have a lower behavior than the rest. There will be time to open positions when the signs of a reactivation of the economy on an international level. But in the short and medium term or touch it because you can lose a lot of money in this listed. It is one of the proposals on the stock market that is better to be absent to avoid unwanted scenarios. In addition, it will be very difficult to reverse its clear downtrend that is targeting all time frames.
On the other hand, its line of business being global may be affected by the lower demand for steel, and especially after the downturn that is taking place in the Gross Domestic Product in China. In any case, his prospects for the future are not optimistic at all. If not, on the contrary, you can lower your production expectations in the coming quarters. To a level that had not been seen in recent years and even decades. We must not take risks in operations that are not going to produce any positive action at all. It may be one of the big losers on the Ibex 35 as a result of the coronavirus pandemic.
Be very careful with Inditex
Its dependence on China can play a trick on it from now on, as has been shown in its latest business results. Despite the excellent management in its business lines, even in its division of online sales which has been the one that has performed the best in recent quarters. But all the conditions are against him at this precise moment. To the point that it has been decided to cancel the dividend distributed among its shareholders. In what constitutes a statement of intent that does not invite to take positions in this company in the textile sector.
While on the other hand, it cannot be forgotten that it starts with some results in 2019 that have been very positive. Where the 2019 results show a sales increase of 8% to 28.286 million euros, and sales in comparable stores increased by 6,5%. Sales in Spain have grown by 4,6%. Spain currently represents 15,7% of total sales, while Europe without Spain accounts for 46%, Asia and the Rest of the World, 22,5%, and America, 15,8%. The company's sales through its global online platform grew 23%, reaching 3.900 million euros, 14% of total sales.
Indebtedness in Endesa
The indebtedness in this important power company can be a drag on your next results and after having everything in your favor there may be changed in your assessment in equity markets. In addition, it will be necessary to be aware of what will happen with its dividend distribution in the next two years and that it could be modified from now on. It cannot be forgotten that one of the greatest attractions of this listed company is this shareholder remuneration and that if it is modified it could lead to a massive sale of its shares by small and medium investors. As it is one of the highest ratios on the Ibex 35.
On the other hand, it cannot be forgotten that it has left behind some very strong supports that can prevent it from recovering in the equity markets. Where the key is that you can regain the level you currently have very close to 18 or 19 for each share. Something that is not very feasible, at least in the short term. Their prospects are not as negative as in the rest of the stocks, but it is not advisable to risk their positions in the face of doubts offered by their operations on the stock market. A shame when a few weeks ago I was in the best of situations, that is to say, free climbing. It may be another of the big losers in the Ibex 35 as a result of the coronavirus pandemic.