The announcement of the business results for the second quarter of this year did not sit well with the valuation of Banco Santander's shares. To the point that they have been the most punished within the selective index of Spanish equities. By pointing to a drop of great intensity, around 4% to gain 35% less than last year. As a consequence of its excessive exposure to the UK, although confirming a first dividend against the results of 2019 for an amount of 0,10 euros per share that will be collected in the month of November.
The adjustment of the goodwill of the United Kingdom, announced on September 24, has played a trick on the investors of the Spanish financial group. Where in a single trading session they have lost many euros along the way and we will have to be prepared for what may happen from now on. In moments of weakness in the banking sector and that can lead to selling pressure to clearly impose itself again on the buyer. After a few weeks where the value seemed to have resurfaced with the intention of exceeding the levels of four euros a share.
At this time, its technical aspect has significantly worsened compared to the previous weeks and there is a risk that the price of its shares may go back to visit the area between 3.30 and 3,40 euros. With a worsening of the situation that would lead to think of the worst-case scenario for the interests of the Bank chaired by Ana Patricia Botín. It is a whole declaration of intent that will have to be confirmed in the coming weeks. Within this conjunctural scenario, of course there are no doubts to fear the worst in the coming days, after this change in their expectations in the price.
Santander: exceed 4 euros
The key to rising with an upward trend, at least in the medium and long term, is necessarily to easily exceed the barrier of 4 euros per share. A level from which the company is far removed at the moment, after the drop in its valuation in the equity markets. If this objective is not achieved, there is no doubt that small and medium investors who have decided to take positions on the listed company will suffer a lot. Because it has all the ballots to go further down in the conformation of its prices. With the risk that it may even test levels below three euros.
This is not a very encouraging outlook for stock market users, and it confirms its evolution this year. Like many of its competitors in the banking sector, such as the BBVA. In a year that has certainly not been very favorable for the interests of the banking entities that have left just over 15% of their valuation by the wayside. There are no better prospects for the exercise that is about to begin, although in the stock market everything can change in a matter of a few minutes. As users are used to in recent years and what was their expectation for the next few years.
Investment strategies
In any case, you can apply some other investment strategy in order to make your operations on the stock market profitable in this difficult period for a large part of financial assets. Because in effect, unless there is a general change in the general trend in the equity markets, the outlook is not very satisfactory for Banco Santander's stock market interests. Beyond that a series of very strong rebounds, which more than to buy will serve to undo positions with a more competitive starting price. As one of the investment strategies that you have available from now on.
While on the other hand, you can also accumulate positions with the new cuts in value to create a savings bag more stable and very interesting for the medium and especially long term. So that in this way, you can have a system in investment that can produce you many joys from now on. Without the need for you to be aware of the evolution of prices almost every day. If not, on the contrary, you can focus on developing other investment strategies, in this case aimed at the short term and to enjoy capital gains in a very short space of time.
Dividend yield
One of the incentives to open positions in Santander is that you can create an investment portfolio in fixed income within the variable. Whatever happens in the listed income markets and that will give you more security in your expectations for the coming years. Not surprisingly, at the moment the profitability of its dividend is approaching the 6% level. A ratio that can be very interesting for your liquidity needs since the payments are fixed and guaranteed every year. Through two or four charges on account and depending on the strategy developed by this financial entity.
Nor should we underestimate this aspect in the remuneration of shareholders since it is a very practical way to protect yourself from very few desired scenarios in the equity markets. Because in this way, you will be able to offset the possible losses that may arise from investments in this bank. In other words, these losses will never be gross, but on the contrary, they will be net. While on the other hand, you will always have the invested capital And you'll be in perfect shape to expect share prices to rebound in the next few years. This is one of the reasons why this investment strategy is aimed at small and medium investors with a more defensive or conservative profile.
Long-term profitable
With the actions of Banco Santander you will have one thing for sure and that is you can ensure some kind of profitability after many years of permanence. It is a bet with very high views regarding the duration of the operations and that in some very specific cases even passes from parents to children and becomes an investment called hereditary. That is to say, it is never executed through sales and therefore passes to inheritance in the children, something very common in Eastern investors and very specifically the Japanese. As an innovative and to a certain extent original element of what an investment in the equity markets should be.
Another very different thing is that you want to do trading operations since in this case this or is one of the most suitable values for this kind of movements that require great speed in making purchases and sales. And where you can lose a lot of money in operations as it is not a financial asset specially designed for this kind of special movements in financial markets. While the large volume in its contracting is another of the common denominators in this bank, as many and many titles move every day that the equity markets are open.
In any case, you are facing a new alternative to enter the always complicated world of the stock market through one of the most contracted securities by investors with all possible profiles. And that also offers the security of a line of business that has been seriously established for several years. Where you only have to wait to make purchases at a much more competitive price than at the moment, being at the end of the day one of your most immediate objectives in any term and investment strategy. Where Santander's results make its price on the stock market plummet
The results disappoint
The national financial group has obtained a attributable profit of € 3.732 million during the first nine months of 2019 after providing 2.448 million, mainly due to the adjustment of goodwill in the United Kingdom, announced on September 24 (1.491 million euros), as well as an additional provision for payment protection insurance (PPI) in the UK (€ 103 million) and other charges (€ 40 million).
This, in addition to charges of € 814 million announced in the first half, mainly for restructuring costs in Spain and the United Kingdom, led to a 35% year-on-year drop in attributable profit for the first nine months. Where the positive note of these business results comes from the fact that the increase in customers allowed a good growth in volumes, with a year-on-year rise in credit and customer funds of 4% and 6%, respectively, in constant euros (that is, excluding the impact of exchange rates).