If there is an indicator par excellence that Warren Buffett in loves, that is the roe, and I have to say that we are also very pro-roe. It is a profitability, specifically the profitability of the net worth of the company, that is, the contributions of the partners or investors. That a company that has a 20% ROE for example, means that it achieves 200 euros of benefits per 1,000 euros of net assets. A major Roe, greater profitability will offer a company on its own funds. And if a company manages to increase its ROE year after year it will mean that the company is increasingly profitable, which will be a positive fact and valued by investors in that company. In summary, a high and increasing ROE is synonymous with good investment decisions, generation of benefits based on the funds provided and that is synonymous with quality and profitable growth and the market will have to reward it.
We locate in the IBEX 35 companies that have registered growth in the ROE between 2023 and 2024 (for the moment with estimated data by 2024). Of the total companies that have managed to promote this profitability, we are left with which the growth of the ROE has been higher than the average of the Spanish selective in 2024, as I say, with respect to 2023. And the list is as follows:
|
Leaders |
ROE23 |
ROE24this |
ROE 24e vs.23 |
Price 2024 |
|
ArcelorMittal |
1,64% |
5,00% |
204,88% |
-12,19 |
|
Unicaja |
4,02% |
8,46% |
110,45% |
56,46 |
|
Endesa |
10,86% |
22,65% |
108,56% |
15,66 |
|
Santander Bank |
5,42% |
10,68% |
97,05% |
22,14 |
|
Ferrovial |
7,82% |
11,99% |
53,32% |
24,50 |
|
Fluidra |
7,45% |
9,83% |
31,95% |
27,44 |
|
Indra |
18,68% |
22,48% |
20,34% |
23,62 |
|
Mapfre |
8,57% |
10,14% |
18,32% |
34,13 |
|
Media Ibex 35 |
17,36% |
16,39% |
14,93% |
35,62% |
Of the 8, only Arceormittal has suffered cuts (-12.19%) in its price in 2024. The other seven selected companies have registered a very remarkable revaluation in 2024, very justified by this excellent evolution in the profitability of their own funds.
It is in sight. Unicaja has gone from a ROE of 4.02%, to a ROE of 8.46%, that is, +110.45% and the market has rewarded it with revaluation of 56.46% in 2024. In the same way, Endesa, with Roe that goes from 10.86% to 22.65%, ( +108.56%), and with revaluation of its capitalization of +15.66% in 2024. Indra, for example, with a high ROE, 18.68% in 2023 and we estimate which will close 2024 with a ROE of 22.48%, which will involve profitability growth of 20.34%and in this case, the market award has been +23.62%.
If we make the same calculations with estimation of results by 2024 and 2025the list of companies that will boost their ROE in the current year compared to 2024 will be: Redeia, Fluidra, Acerinox, Railway, Arcelrmittal, Rovi, Acciona Y Sacyr. I have to say that we have eliminated from the Grifols studio, due to excessive risk and the two socimis of the Ibex 35 because in its sector the analysis of the ROE has no consistency.
|
Leaders |
ROE24this |
ROE25e |
ROE 25e vs. 24e |
|
Redeia (REE) |
9,98% |
36,85% |
269,24% |
|
Fluidra |
9,83% |
12,90% |
31,23% |
|
Acerinox |
10,00% |
13,08% |
30,80% |
|
Ferrovial |
11,99% |
14,49% |
20,85% |
|
ArcelorMittal |
5,00% |
5,78% |
15,60% |
|
ROVI LABORATORIES |
26,00% |
29,90% |
15,00% |
|
Act |
7,94% |
8,76% |
10,19% |
|
Sacyr |
7,92% |
8,62% |
8,84% |
|
Media Ibex 35 |
16,39% |
16,79% |
8,49% |
Well, by 35 of the IBEX, the average of the ROE in 2024 under our estimates will be 16.39%, by 2025e the average will rise to 16.79% and the average growth for the ROE of the IBEX 35 between 24 and 25 will be of 8.49%. Of the 35 companies of our selective, these 8 will register the growth of the ROE superior to that average. And of those, three: Fluidra, Ferrovial and Arcelor Mittal, They repeat in the ranking, because they were already the most profitable in 2022 and 2023, so the stability in the growth of ROE still has more merit and brings more potential.
In summary, an investment strategy based on “buffett” criteria, that is, looking Sacyr.
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