One of the values that currently awakens the most expectation among small and medium-sized investors is precisely the electricity company Endesa. You are at a very important time to resume your Uptrend or on the contrary, make corrections in their prices of great intensity. In this sense, it is expected that it will not be necessary to wait too long to find out what the short-term trend will be. With the primary objective that small and medium investors can resume an investment strategy.
At the moment, Endesa's prices are moving in a lateral band that goes from the 21,70 euros 23. It must exceed any of these intermediation margins to become bullish or bearish for the next few months. In any case, the decision by the European Central Bank not to raise interest rates until the first half of 2020 has boosted their prices. To the point that it has taken it to levels of 23,15 euros per share and very close to the free rise figure. The most beneficial for the interests of small and medium investors because it has no resistance ahead.
While the most negative element lies in the fact that it is a overbought value and it no longer has an upward path or at least it is very scarce. This can determine that the selling pressure is imposed on the buyers in the short and medium term. With the primary objective of adjusting the law of supply and demand. In this sense, there is no choice but to be very careful with the operations carried out in this important electricity company. Because there is no doubt that we can remain hooked for a long time in their positions.
Endesa: real status
The situation of this electric company in the hands of Italian capital is very complicated. Because although its state or technical aspect invites us to open positions from now on, it is no less true that has gone up a lot in recent months in what is considered as altitude sickness. And as all small and medium investors know, nothing in the stock market goes up or down forever, much less in the securities listed on the equity markets. In addition, at any time the situation can change or what is the same, its trend. To go from bullish to bearish without practically realizing it and for this reason we must act with great caution in the decisions that we are going to make from this moment on.
While on the other hand, we cannot forget that when interest rates rise, the reactions of this electric company will be that of head down. Perhaps with the same intensity with which it has risen in recent months. Beyond other technical considerations and maybe also from the point of view of its fundamentals. In what is conformed as a very correct investment strategy and above all adjusted to reality. On the other hand, not all periods will be so favorable for the interests of this important sector of Spanish equities.
Target price around 20 euros
It should also be noted that Endesa's target price is well below those currently set. The different analyzes have configured a price that is stipulated between 20 and 21 euros per share. Namely, is almost 20% above these estimates by financial intermediaries. In this sense, special care must be taken to carry out any kind of transaction in the security. Due to the negative effects it can have on the operations of small and medium investors. This is a reality that must be taken into account from these precise moments.
On the other hand, it is also very important to assess the fact that a security such as this is more stable than the rest and in this sense it can give investors greater peace of mind. Especially in adverse scenarios for national equity markets and beyond our borders. In this situation, it is where the Spanish-Italian electricity company can play a very relevant role so that they can capitalize on savings in short-term operations.
To the point that it has traditionally been considered one of the refuge values by excellence. Like his colleagues in the energy sector. Something that undoubtedly can be repeated if these conditions are met in national and international equities. Although probably without the intensity in the increases that have occurred until a few months ago.
Business results
The operating cash flow for the first quarter of 2019 was 335 million euros, that is, 13 times higher than that of the same period of 2018. This was due to the increase in EBITDA and the improvement in working capital (-39% ). While on the other hand, the net financial debt has increased by 1.127 million euros compared to December 31, 2018 as a consequence of several factors, among which the impact of the entry into force of the aforementioned IFRS 16 stands out, which It has meant registering an increase of 186 million euros in net debt as of December 31, 2018.
Where it is shown that the investments made for the development of new renewable generation parks, and the payment of the interim dividend charged to the results of 2018, amounting to 741 million euros, made on January 2. These are results that have not been excessively reflected in the price quotation since the results of the second and third quarter of the year will be much more important. They will give a little more the guidelines of the strategy undertaken by this electric company, in one sense or another and that can serve so that small and medium investors can make their investment decisions.