At Bestinver they believe that the market insists on seeing the glass as half empty, given the heavy losses that all asset classes are suffering since the central banks began raising rates to fight inflation, discounting a harsh recession that has not ended occur. But at Acciona’s investment firm they prefer to see it half full.
Bestinver’s funds do not escape these falls, especially when compared to their most direct competitors. But Tomás Pintó, head of international equities at the management company, assures that the portfolio’s revaluation potential is greater than 100%, which would allow the value of Bestinver Internacional and Bestinfond to double in four years, just operationally, without having to taking into account the extra profitability that the companies in which they are invested can achieve.
And it justifies this argument in the strength that they are showing in recent quarters. “The market discounts a recession that is not seen. But more than 50% of our securities are buying back shares, they have increased operating profit by more than 30%, with 37% growth in cash flow” in a context in which that the production chains are normalizing and the prices of raw materials are correcting and excess liquidity is normalizing. In short, “a favorable scenario to generate extraordinary returns in the future,” stressed Pintó.
This dichotomy between market sentiment and investment opportunities is also being reflected in bonds. “In fixed income prices, a very bad situation is discounted that has not yet arrived. A very significant indicator is the estimated bankruptcy rate in Europe. Moody’s says that the default rate is going to be 3% in the next twelve months and with the spreads that exist now, the market is thinking that it is going to 9%, which is just one of the worst scenarios of this agency. So the market is now discounting that worst scenario”, explains Eduardo Roque, who assures that in his 23 years of professional experience “I have never seen an opportunity to invest in fixed income like this. What I don’t know is when it will be reflected in the funds”.
Mark Phil is a former market analyst and consultant. Mark in his 9-year career as an analyst, worked with top market players like Prodge LLS, Westat Inc. and Precision Opinion Inc. He moved towards writing in the year 2013. In the past, he undertook several freelance projects to begin his writing profession. Mark completed his economics degree from Columbia University. Along with performing sub-editorial duties, he is also writing a book on Market analysis.