After a tough year, the arrival of 2021 finds investor sentiment at its highest point in recent months. Vaccinations and the EU’s Recovery Fund feature as two positive elements on the market agenda, increasing investors' willingness to take risks, while support from central banks and governments continues.
With the New Year offering a chance for new beginnings, BusinessDaily.gr presents shares on the Athens bourse that constitute
its "Top Six" from top experts in the business. The ATHEX General Index raced ahead 30% in the last quarter of 2020 but for the year declined by 11.7%, versus gains of 3.5% for the year for Germany’s DAX and a dip in France’s CAC of 8.15%.
Investors need to be awared of lingering risks. There is still great uncertainty about the course of the pandemic and how the global economy will cope in the post-Covid environment. In Greece, businesses and households remain in a weak position after
the ten-year financial crisis, as banks face a new wave of bad loans, which is estimated to reach up to 10 billion euros due to the
coronavirus. There are no easy solutions in tourism, after the sector lifted the Greek economy in the last few years, while Turkey continues its aggressive behavior in the region.
Based on the top picks and stocks that stand out from the rest, this is an indicative (not exhaustive) list of options that offer
investment interest. As usual, the top choices are companies with long-term investment plans, strong management and transparency. Our "Top Six" companies come from different industries, however, the dominant trend is one: the push for clean energy and environmental protection is dominating investor interest.
Although it recorded an impressive 80% increase for 2020, there are many who believe that the price of the share will keep rising. There has rarely been such a large restructuring of a company in the EU energy sector or in Greece, Eurobank Equities point out in a report. EBITDA almost tripled on an annual basis in 2020, due to regulatory changes and a favorable input cost environment. Also, a 2nd phase of transformation will be implemented with further portfolio restructuring and upgrading of RES. The brokerage gives a target price of 10 euros per share, translating into potential upside of 35% from current levels.
With analysts talking about "hidden values" in the company, the stock has attracted the interest of many, even though it had an average year on the Athens bourse in 2020 (-7%). It is an attractive trade for the opening of the economy and has been included in the top choices of several analysts. The company is projected to be significantly strengthened in 2021 by new tax rules and free cash flows that are expected to exceed 400 million euros in 2021-22. According to analysts, it is expected to give significant returns to its shareholders in the future, with the dividend return in 2021 estimated at 13.2% and in 2022 at 15.1%. Optima Bank gives a target price of 14.6 euros and a ‘buy’ recommendation. The share is now trading at 10.95 euros.
Mytilineos presents strong growth prospects, despite the problems created by the pandemic, point out experienced investment managers, who emphasizing that the stock also offers defensive features. The company has been transformed into a differentiated model, focusing on electricity generation / supply (through a vertically integrated model) and increasing contract revenue generation in the clean energy ecosystem. Also of interest is increased activity in the field of renewable energy sources, not only as a manufacturer, but also as a manager - something that potentially adds to it higher value. It currently has a 'buy' recommendation and a target price of 15.23 euros, from Alpha Finance. Mytilineos shares rose 22% in 2020 and the shares trade at around 11.90 euros.
The Greek stock market is likely to have left behind the worst and to have already entered a positive cycle, according to Eurobank Equities, which has a target price of 5 euros on the share. For 2020 the stock closed with losses of 13.3%, but in the last quarter jumped by 38%. We believe that the market, the brokerage points out, may have entered a positive cycle which may boost trading activity and prices higher in coming years. The recent positive news on the vaccine front, the first moves in the Greek business cycle and the extensive restructuring that took place, all create a favorable scenario for a strong economic recovery supported by the implementation of the EU’s Recovery Fund, it adds. The stock trades at about 3.89 euros.
The group with Greece's largest investment program will play a crucial role in the country's energy future. The share seems to have entered the radar of investors for good, outperforming the general index for 2020 (+ 14% at 2.65 euros). IPTO's ten-year investment program includes investments worth 5 billion euros in projects to strengthen and develop electricity transmission infrastructure through the interconnection of islands with the mainland. IPTO Holdings SA trades at a discount in relation to its assets and to other similar companies in Europe, according to Piraeus Securities, which has slapped an "Outperform" recommendation on the stock with a target price of 3.3 euros.
OTE remains among the top choices in Greek equities, as the company proceeds with cost containment and restructuring efforts. Following the agreement to sell fixed telephony business in Romania, the dividend to be given to shareholders is expected to boosting the share yield by 3-4%, analysts say. It is considered to be an attractive "defense" option for the pandemic era, with a dividend yield in 2021 exceeding 10% (including the usual dividends, redemption, special dividend related to Romania) and close to 7-8% as of 2022. Citi has a target price of 20 euros for OTE shares that gave up 7.5% in 2020, closing at 13.18 euros.