These are not good times for the audiovisual media that are listed on Spanish equities. They are immersed in a bearish channel of great depth and that should take them to even lower positions in the quotation of their prices. There are currently two companies representing this important sector: Mediaset and Atresmedia. With an evolution that seems to be traced one of the other. The only difference is that the first of them is listed in the selective index of Spanish equities, while on the contrary Atresmedia is integrated into the national continuous market. But with very similar expectations.
In both cases, there has been a significant depreciation in their prices in recent trading sessions. On the other hand, we cannot forget that they have been two of the most affected stocks on the Spanish stock market during the last year, in 2018. This fact has caused the Mediaset Board of Directors to decide at its meeting to carry out own share buyback program, which has been sent to the National Securities Market Commission (CNMV). This causes it to have an important 5% bounce, even if it was punctual.
But if both values are characterized by something, it is because their technical aspect does not invite to enter their positions, at least in the short term. Not surprisingly, the risks are very high because their prices may still fall further. Where the short positions are being imposed with a crystal clear on the buyers. Although we will have to wait for both listed companies to form a floor from where they can recover in their positions. This is one of the reasons why you have to be very attentive to its evolution in the coming days.
They distribute dividends with more than 10%
In any case, there is an aspect that works in favor of these two values of Spanish equities. It is none other than the high dividend that they offer to their shareholders every year. Nothing less than about 11%, like leaders in this return to investors. A not inconsiderable amount to create a stable savings bag year after year. No other company offers a similar profitability since the one that comes close is the electricity company Endesa with an interest at levels of 7%. In principle, it seems like a good reason to open positions, both in Mediaset and Atresmedia.
To highlight the relevance of these payments, nothing better than to illustrate it with a practical example. An investor who has made an investment of 10.000 euros in one of these two companies, will have collected a profit of around 1.100 euros every year. In other words, in just over eight years it will have amortized the operation. Whatever happens in the equity markets. This fact, in theory, should encourage small and medium investors to take positions in Mediaset and Atresmedia. But it is true that this is not the reality.
Mediaset questioned on the stock market
There are many doubts that the television sector harbors at this precise moment. In particular, regarding the advertising revenue since it is the only source of income at the moment. Beyond other technical considerations and maybe also from the point of view of its fundamentals. Because the competition to the Internet media or other technological systems are very strong. In other words, advertising revenue is being distributed among more and more media. And this fact does not like the financial markets.
On the other hand, advertising is an activity that is closely linked to economic cycles and in this sense expectations are not very favorable. The decrease in the economy International is a fact and downward revisions are a constant in the reports prepared by different international organizations. This penalizes the valuation of Mediaset and Atresmedia and that is why they show less adjusted prices than just a few years ago. In this sense, they are securities that may still undergo significant price corrections.
Mediaset at the crossroads
In recent trading sessions, the securities of Mediaset Spain They are lurching upward and downward. To the point that there is no doubt that they are misleading a large part of the small and medium investors. At the point where they do not know what strategy to use in their investment. Although yes, within an impeccable bearish channel through which the price has been moving since the middle of last year. Where there is a series of rebounds with a certain frequency that mislead investors.
From this general scenario, you have the resistance at levels very close to 6,5 euros per share. On the other hand, if they were exceeded, positions could be opened to make the savings profitable during a period of time that is not excessively long. Although of course what really matters is that there is a change in trend, something that has not happened so far. Not much less. But at least it should serve to put the securities of this company on the radar to start movements in the equity markets.
Atresmedia obtains 69 million
With regard to the other company in the sector, Atresmedia, its business results do not give many clues about the strategy that small and medium investors should take from now on. Because in effect, the communication chain has obtained in the first semester of the year a Ebitda of 101,3 million euros and its net profit has reached 69,3 million euros. In an advertising market that remains in line (+0,5%) with the same period of 2017, according to external estimates, the listed company has managed to maintain net income to reach 550,6 million euros.
On the other hand, it should also be noted that Atresmedia has carried out effective cost control management and as a consequence Operating Expenses grew only 0,5%. In which it stands out that it is discounting the acquisition of the digital advertising marketer SmartClip. On the other hand, the net income of the audiovisual business stands at 513,8 million euros and is broken down as follows: 443,4 million obtained from the television advertising. With this data, Atresmedia Televisión's share of the market stands at 41,6%. Data that have not excessively affected the conformation of their prices in the equity markets.
A very volatile sector
A common denominator for the entire sector, and therefore for these two companies, is their high volatility. Where one day it can have a very considerable rise and the next day many euro cents can be left on the road. It is highly recommended to perform trading operations, to make the savings profitable in a very short space of time. Where the most aggressive investors are the ones who mostly open positions in these securities. To the detriment of the most defensive who so alone look at the high dividends distributed by these titles that are integrated into the Spanish stock market.
On the other hand, the division's net income reaches 42,2 million euros, in line with those obtained in the same period of 2017. The gross operating profit of the radio business in the accumulated as of June 2018 is of 9,1 million euros, which represents a margin on net income of 21,5%. In a scenario in which it will be necessary to show what will be the evolution of their titles in the equity markets from these precise moments. Although it will depend to a certain extent on the evolution of the stock indices of the Spanish stock market. Not surprisingly, these kinds of companies are very linked to economic cycles And in this sense, now is not a good time to open positions.
Cut in advertising revenue
With regard to audiences, it is a fact that they are losing steam as a result of the increase in television offers and therefore this factor affects the publicity generated in these communication channels. It is more than enough reason for these two companies to continue in a downward trend in the next trading sessions, beyond what may happen with other kinds of technical considerations. Where there is a series of rebounds with a certain frequency that mislead investors.
They are therefore factors that influence the formation of prices, in one sense or another. At the moment, everything seems to indicate that they will continue to decline, although it is not known until what moment. This will be one of the keys to carry out any kind of strategy with these two national equity values. At the moment, they do not have the acceptance of the recommendations by the different financial agents. Where there is a series of rebounds with a certain frequency that mislead investors.