Knowing which stock has performed the worst on the Spanish benchmark index can often be invaluable for managing your portfolio. This is useful not only for strategically deciding which stocks to reject to maximize your savings, but also for anticipating trend changes that could push their prices to more profitable levels. In any case, this information is particularly relevant for small and medium-sized investors, as it provides a more objective view of the stock's current performance, though not necessarily for the medium and long term.
From this general perspective, the most important piece of information is identifying the worst performer on the Ibex 35. This is especially relevant given that this major European stock market index has appreciated by slightly more than 10% this year . Over the last 52 trading sessions, its equity value has fluctuated within a very wide range, from 8.500 to 11.000 points. All of this has occurred in a year that, a priori, did not seem destined to reach such positive levels. In fact, some financial analysts had predicted corrections in its share prices.
On the other hand, it's also important to remember that Spanish equities have been on a positive trend for many years. And there's no doubt that this trend will eventually have to break, perhaps quite abruptly, as some financial market experts suggest. This is, broadly speaking, the outlook for the Spanish stock market this year. With just a few weeks left before the final assessment of its performance in 2017, it's very informative to identify the best and worst performers in the benchmark index.
Mapfre at the bottom of the values ​​in 2017
One of the most relevant facts about the Spanish stock market is that the insurance company Mapfre has become the worst performer on the Ibex 35 during this period. Its share price is currently at €2,72 , representing a depreciation of almost 6%, in stark contrast to other stocks showing an upward trend, some even with gains exceeding 10%. Over the last 53 trading sessions, its share price has fluctuated within a very wide range, between €2,53 and €3,30, indicating that it is currently trading at the lower end of its price range. This could be an opportunity to buy shares with the aim of reaching the higher end of this price range.
On the other hand, Mapfre currently offers a dividend yield of 5,35% , placing it among the highest dividend payouts to shareholders. This ensures a fixed and guaranteed income every year, thanks to a unique strategy that creates a fixed income component within the variable component. This is an added incentive to take a position right now. Furthermore, this is a highly liquid stock with a large number of shares trading every session, making it easy to become invested, as is typical with mid- and especially small-cap stocks.
Bearish in the short term
Mapfre's shares are currently in a short- to medium-term downward trend. After reaching a peak of €3,3 per share in April , in contrast to other stocks in its immediate vicinity, there are still no signs indicating a change in its performance that might encourage you to take a position in this listed company. This is ultimately one of the main drawbacks when analyzing its presence in the equity market this year. Certainly, it hasn't been as satisfactory as small and medium-sized investors had hoped at the beginning of the year.
In any case, you can see how in the short term it's finding temporary support around €2,5, before reaching much more challenging levels like €2,2. But don't forget that selling pressure is increasing among financial analysts, especially after breaking the important €3,20 barrier. In other words, market sentiment at the moment is clearly leaning towards selling . Therefore, there's little hope that it will rise again in the coming months, at least not towards the end of the year, which is already too short a period to risk your long positions.
Benefit reduction this summer
Mapfre's business results have not been as positive as the financial markets had hoped. Far from it, as Spain's leading insurer posted a net profit of €444,6 million between January and September. This represents a 22,3% decrease compared to the same period last year , due to the costs incurred from recent natural disasters in North America and the Caribbean, as explained by the company itself. Mapfre also added that without these events, attributable profit would have grown by 8,6%. This difference explains the company's performance in recent weeks.
Another interesting piece of information reflected in these results is that, regarding shareholder remuneration, and despite the drop in profit, the board of directors approved an interim dividend of 6 euro cents per share from the 2017 results . Nevertheless, net worth at the end of September reached €10.792 billion, while equity stood at €8.781 billion, and total assets amounted to €67.733 billion. In any case, the results have not been well received by the financial markets, which reacted with widespread declines that have not inspired optimism among investors who wished to take a position in this insurance sector stock.
Positive analysis about the company
As this article clearly shows, the sentiment among financial agents isn't very positive regarding this stock. However, there are always some financial intermediaries who see the outlook differently. This is the case with XTB analysts, who suggest that the worst is over for Mapfre and estimate its target price at around €3 per share in the medium term. They even foresee substantial changes in certain indicators to support this trend reversal, which would represent a potential upside of nearly 5%.
However, if the price breaks through the important €2,48 per share barrier , coinciding with previous support levels, the situation would change significantly. At this price, you should consider a selling position. In this regard, the coming days will be crucial in determining the direction of the trend from this point forward, allowing you to make a more informed decision based on sound technical analysis. It's no coincidence that Mapfre shares are among those most closely watched by small and medium-sized investors, especially those with a more conservative or defensive approach to equity markets.
Achieve their goals
It is also worth noting their determination to achieve their business objectives despite the natural disasters that have occurred this summer. In any case, the company itself believes that the results demonstrate its strength and resilience. They maintain that it is even prepared to manage all kinds of natural events, such as those that have taken place this summer. They insist that " Mapfre's financial strength and capacity are beyond question, and we are continuing with our profitable growth strategy." This factor could revitalize prices, at least in the medium and long term.
In any case, and as a positive aspect of its value, it's one of the equity options with the greatest potential for appreciation over the next twelve months. Given its poor performance this year, which made it the worst performer on the Ibex 35, it has considerable room to recover from current prices. And certainly much more so compared to other stocks in the index, such as BBVA, Repsol, Iberdrola, and Red Eléctrica, among other prominent companies.
From this point of view, there is more you have to gain than lose from now on. Although provided that you assume the risks that this kind of operations entail in the equity markets. In this sense, you may be tempted to open positions in one of the most characteristic values ​​of the Spanish selective index. But considering your current situation. Without being one of the blue chips of Spanish equities, it is one of the main bets within small and medium-sized companies.