ANNOUNCEMENT: Expert Investor is now PA Europe. Read more.

UEFA EURO 2020: SPAIN vs SWEDEN

Home to a plasma powerhouse; Spain takes on Sweden, which will be looking to mimic the success of its stock market

SALOMÉ BOUZAS ROMERO

MUTUAL FUND ANALYST & PORTFOLIO MANAGER

TRESSIS SV

Score prediction: SPAIN 2 – SWEDEN 1

INVESTMENT INSIGHT:

If you think about Spanish companies that are world class leaders in their industry, the first one that probably comes to mind is Inditex. Even though the headquarters of Inditex are a few kilometers away from where I was born, I would like to introduce the readers to another global leader that is probably less well known.

I’m talking about Grifols, a global company, established in 1909 in Barcelona, focused on the production of plasma-derived medicines and transfusion medicine.

Let’s begin explaining what the plasma is: our blood is make up of different components – for example red cells and white cells. The biggest component is plasma which consists mostly of water containing proteins and antibodies.

Grifols picks out these proteins to produce medicines that can cure a huge variety of diseases. The company represents 20% of a market that has an oligopolistic structure and high barriers of entry (it takes six years to set up a factory).

In its Q1 reporting we have seen the resilience the company has shown during the pandemic: its revenues have declined slightly in the last quarter, achieving a EBITDA of €322m due to very compelling operating margins. This was accomplished thanks to the contribution of new products and its ability to increase prices, both of which have offset its lower sales.

In addition to its competitive advantage, we see its innovation to which it dedicates €300m each year, as a driver that will help Grifols maintain this privileged position in a healthcare segment that remains globally under used.    

ROLAND DAHLMAN

HEAD OF ASSET MANAGEMENT

INVESTERUM

Score prediction: SPAIN 3 – SWEDEN 1

INVESTMENT INSIGHT:

In our industry we constantly remind clients that Past Performance is no guarantee of future results when it comes to evaluating investments. However, in this particular football match, that statement could probably not be further away from the truth.

Over the last 100 years, Sweden has beat Spain only three times in football. Last time it happened was in Stockholm on the 7 October 2006 and I recall how the loss left Spain in a state of shock.

Since that very day in October 2006, the Spanish stock market (measured as IBEX 35), excluding dividends, has fallen over 30% giving a negative average annual return of -2.2%.

During the same time period, the Swedish equity market (measured as OMX 30), excluding dividends, has risen 113% giving a positive average annual return just shy of 5%.

The loss against Sweden back in 2006 is probably not the only way to explain the relative performance between the two equity markets, but rather that the Kingdom of Sweden has world class infrastructure, cutting edge tech companies and the growth is green.

Spain, however, is the undisputed favourite to win the group.

MORE ARTICLES ON

  • Can M&A and buybacks breathe life into UK market?

    Can M&A and buybacks breathe life into UK market?

    Both buybacks and M&A should help realise value in UK shares, boosting prices and giving investors another reason to consider the UK stockmarket Not only does M&A activity appear to be picking up, with a high-profile bid for UK electronics retailer Currys, but the scale of company buybacks continues to accelerate. If it goes well,…

  • Capital Group launches multi-thematic Article 8 funds

    Capital Group launches multi-thematic Article 8 funds

    Capital Group has launched a set of multi-thematic sustainable funds that are available for investors in Europe, writes Christian Mayes. The Capital Group Sustainable Global Opportunities fund (LUX) will invest in global equities, while the Capital Group Sustainable Global Corporate Bond fund (LUX) will target fixed income exposure. The launch also includes a multi-asset offering…

  • Bond funds pull in €29.7bn in January – LSEG

    Bond funds pull in €29.7bn in January – LSEG

    Bond products were the best-selling asset class in January, according to LSEG Lipper’s European Fund Flow report, writes Christian Mayes. The asset class pulled in a net €29.7bn in the month, while Money Market USD grouping was the best-selling Lipper Classification after receiving €11.2bn inflows. Providers of mutual funds pulled in €22.5bn, while passives saw net…

  • Quarter of Article 8 funds at risk of greenwashing – MainStreet Partners

    Quarter of Article 8 funds at risk of greenwashing – MainStreet Partners

    A quarter of all Article 8 funds could be accused of greenwashing based on their sustainability framework and practices, according to MainStreet Partners, writes Christian Mayes The 24% of funds classified as a greenwashing risk by the 2024 ESG Barometer report marks a four percentage point increase from the 20% flagged at the end of…

  • EU green rules could stymie decarbonisation projects – ExxonMobil

    EU green rules could stymie decarbonisation projects – ExxonMobil

    The European Union’s climate regulations may lead to it halting its investments in Europe, ExxonMobil has warned. Speaking to the Financial Times, Karen McKee, president of the product solutions division, said the oil and gas giant had struggled to begin decarbonisation projects in Europe due to the regulatory burden. The result, she added, was that…

  • ICE flags need for Europe to double green investment

    ICE flags need for Europe to double green investment

    Investments to modernise energy and transport must double by the end of the decade to reach 2030 climate targets, the EU has been warned. According to the Institute for Climate Economics (ICE), which has released the European Climate Investment Deficit report, the bloc lacks what it calls a “consistent tool” to ensure monitoring of the…