The double-digit rises that the main European stock indices are reaping, except the London FTSE, have favored the change that the main Spanish value managers are surely continuing to make in their portfolios. A rotation that they already began to execute last year and that this rally will allow them to consolidate, leaving those values in which the potential has been reduced and entering others where they consider that there is still a way for it to emerge. At the moment, the only orientation to know their movements are the quarterly letters and it may be that in a short time that possibility will no longer exist if, as Cobas has announced, the rest of the firms begin to publish them semi-annually.
One of the funds most followed by Spanish investors is Bestinver Internacional, not surprisingly, it has more than 12,000 participants and almost 1,200 million euros of assets. Its manager, Tomás Pintó, continues to show confidence in the revaluation of HelloFresh, one of the values where they have increased their position, penalized by an environment of high inflation and lower spending. “The company decided not to pass price increases on its products and has invested heavily in the automation of its warehouses,” he says, which has had an impact on its business figures. But “it continues to generate value, having 20% of its market capitalization in net cash”, which may allow it, in his opinion, to triple its value in the coming years.
Other notable movements of Bestinver Internacional in the fourth quarter of last year are the purchases of IFF, the world leader in enzymes, excipients and fragrances for the food and pharmaceutical industries, the Heineken brewery, ASM Internacional and AMD. And they have increased at Bayer, ING and Intesa.
Azvalor Internacional is one of the funds that has most attracted the attention of investors due to its extraordinary results in 2022, which led it to win the elEconomista.es Global Active Management League, with almost 46% profitability thanks to to its commitment to companies related to raw materials and energy. Stocks that are beginning to reduce in the portfolio in favor of others in which they are building small positions, among which they mention in the letter Ashmore, B2Gold, Elis, Grifols ADR, Howden Joinery and Semapa, although “none of them with a weight greater than 1% still”. These incorporations are added to those already made in the third quarter, where they saw an opportunity to enter Vallourec, JCDecaux and Schindler.
Other relevant movements of Azvalor Internacional have been the increase in the weight of British American Tobacco, Vallourec, Pan American Silver, Endeavor Mining and Petrofac, while on the sales side, they have gotten rid of Civitas Resources, DHT Holdings, Euronav, Gold Fields, Schlumberger, Tenaris, Trican Well, and have reduced the weight of Whitehaven Coal, Arch Resources, Teck Resources, NOV, Vale or Logista.
Investors are also scrutinizing Cobas International as they have behind them the considered father of value in Spain, Francisco García Paramés, who in the last quarterly letter maintains his conviction in energy-related companies, although he has reduced exposure to 34%, while it has increased the weight of the pharmaceutical sector to 9% from the 3% it had in 2021. Some, such as Viatris and Teva, already had them in their portfolio and made more purchases, while they entered Fresenius, Organon and Taro. “These are companies whose share price has fallen by about 65% in the last five years, which usually indicates that it may be a good place to go fishing,” he says.
Magallanes European Equity is achieving a better result this year than its competitors, rising 12.29%, which places it in seventh position in the Global League. Its manager, Iván Martín, points out in the fourth quarter letter that they have fully sold their position in the Euronav crude oil shipping company, in addition to Porsche Automobil Holding and Autogrill. “While they have increased exposure to other securities that “we already had in our portfolio, taking advantage of occasional price drops, such as SKF AB, Signify, Faurecia, Husqvarna or KION Group, among others.”
Spanish stock market
Although international stock funds are the ones that hold the most assets in value managers, Spanish stock funds also serve as a reference for the ability of managers when selecting securities. And at a time when the Ibex is revaluing 12% in the year, the eyes of investors are once again set on one of the most cyclical indices, thanks to the weight of financial institutions. A sector that in the Bestinver Bolsa already weighs 26% of the portfolio. Among the incorporations of the last quarter is Aena and they have increased the weight in Inditex, while they have reduced in Repsol and have sold Ferrovial.
At Azvalor Iberia, they have reduced their exposure to Galp and Logista but have increased it to Grifols and Prosegur Cash. And the managers explain that Sonae’s takeover bid for Sonaecom, with a 25% premium over its last price prior to the announcement of the same, “undervalues the company, and we are not going to attend, unless the regulator forces us to.” Regarding Cobas Iberia, they sold Logista, Sonaecom, CIE Automotive and Mediaset España, while reducing their exposure to Técnicas Reunidas and Sacyr, while increasing the weight of Atalaya Mining, which already accounts for 9.7% of the portfolio (followed by Elecnor, with 8.9%) and Línea Directa.
