ENCE's expectations in the equity markets currently depend on the possible decision to close the Pontevedra pulp mill. In this sense, this past weekend a crowded demonstration was held in the streets of the capital of the province of Pontevedra and Marín to demand the closure of the Ence factory. Under a banner with a title like the following: “Pola annulment gives an extension of Ence. Pole sanitation integral da ría ”, to demand the extension of Ence. This is a scenario that can hinder the rise of the company in the conformation of its prices.
At the present time, where Ence becomes one of the most profitable securities of the selective index of Spanish equities, the Ibex35, it is one of the most bullish of all. With an annual profitability that reaches double digits and with broad expectations to exceed current levels in its prices. Since this value was listed on the Ibex 35 it has not stopped rising, with its logic and corresponding corrections. Above the great values of the Spanish stock market, especially those of the banking sector.
But the possible closure of the Pontevedra cellulose is acting as a Damocles sword to continue in its current uptrend. To the point that it is the factor that ultimately determines its movements in the coming months. So that their actions are receptive to purchases or, on the contrary, sales. Not surprisingly, its evolution in the stock market is mediated by this fact that small and medium investors are pending. Because it cannot be forgotten that in recent trading sessions its volatility has skyrocketed significantly. With differences from one session to another of up to 8%.
Ence: one of the rising values
Within this general context, it will be necessary to be very attentive from these moments of the possible closure of the Pontevedra cellulose. Where, any news can lead to their prices at one or other levels in the quote. At the moment, the national paper mill is trading at levels of 3,80 euros per share, with an annual revaluation that is in the double digits. Being one of the most recommended values by the different equity market analysts. With an immediate objective that is at levels a little higher than four euros.
However, and despite its appreciations in recent months, there is no doubt that it is one of the values that present the greatest volatility in the configuration of their prices. With differences between their maximum and minimum prices that can reach up to 5% or even more intensely. From this point of view, it is a much more dangerous security for the interests of small and medium investors. Where only the most aggressive are in a position to open positions in this company integrated in the selective index of Spanish equities, the Ibex 35.
Higher risk in corrections
In any case, you cannot forget that you are exposed to a cut in your prices as a result of your latest increases. But also about the possible closure of the Pontevedra cellulose. Adding many more unknowns than desired by a good part of the small and medium investors. Where anything can happen depending on the negotiations that are started from now on. Beyond another series of technical considerations and even from the point of view of its fundamentals. So that it can go up or down in the remainder of the year.
In sessions of a certain downward draft, it cannot be forgotten that Ence has been one of the few stocks to close in a positive sense and sometimes with a percentage worth noting due to its great intensity. Although right now you are at a great crossroads for the course you are going to take their prices from now on. Because it is not entirely clear that it can develop under an uptrend as it has happened until now. In a certain way, it will also depend on what the selective of national equities does, as in the rest of the domestic stock market. Although, of course, its environment is clearly favorable so that you can make the savings profitable through this personal bet.
With very positive news
In order to counteract the negative effects of the closure of the Pontevedra pulp mill, other much more positive news for their business interests has appeared in the media. One of the most relevant is the one that has to do with the complex of renewable energy of Ence in Huelva. To the extent that it has renewed the voluntary European EMAS certificate, a community regulation of eco-management and eco-auditing that aims to promote continuous improvements in the environmental performance of organizations.
Like the own results that it has presented in the last quarter. Where it has been shown that its results have been reduced by around 40%, affected by exchange differences and the increase in pulp inventories in view of the Navia biofactory shutdown, which will be longer than usual to increase its capacity by about 80.000 tons. This is news that has been very well received in the financial markets by small and medium investors. Beyond other technical considerations on the part of the value.
The fact that the company has frozen the investments of its Strategic Plan in its Pontevedra plant and will concentrate them in Navia has also been present, given the legal uncertainty caused by the change of criteria of DG Costas on the extension of Ence in the Pontevedra province. And that without a doubt is one of your big problems so that you can quote at a better price this year.