These are the bargains left by the Ibex 35 in the first half of the season

We search the IBEX 35 for the most undervalued companies by fundamental multiples and because of this search we take the ratio best known and employed by ordinary investors, the PER. Under this criterion, the most effective options, that is, the businesses with the maximum upward potential are, how could it be otherwise, companies with a small business in raw materials, such as ArcelorMittal, Acerinox, Repsol, companies in pro-cyclical sectors such as ACS, CIE Automotive , companies which are favored by the, not distant, rate hike, such as Mapfre, BBVA, Caixabank and Bankinter.

In the case of the banking sector, BBVA continues to advance on the market by getting the backing of brokers such as JP Morgan and its potential in the Spanish stock market has additionally increased. In addition, as a result of its approach to bitcoin, it's positioned itself as the first bank in the eurozone by which this cryptocurrency could be acquired along with benefiting from the momentum of the possible rise in interest rates.

The exact same occurs with Bankinter, that is recovering on the Ibex 35 following the downward sessions in the beginning of the month of June. The organization can also be reinforced by the interest of mutual funds which have improved their outlook in the marketplace by going from negative to stable.

In addition, Telefónica sneaks in, a business that's been penalized for all semesters and that, based on its new strategic plan and its fundamentals, is clearly undervalued, and Indra, a technology business closely linked to public funds.

But if we really want to find cheap companies by multiples, we must not stay only with the PER. A low profit ratio, when the expected growth of those profits can also be low, null or even negative, isn't indicating an undervaluation. Therefore, to find cheap companies by results, we ought to add the variable PEG to your analysis. This ratio relates the PER with the CBA (growth in Earnings per share). If a company features a low PER and a higher CBA (which is desired) the PEG will be really low and, therefore, the company will be clearly cheap by multiples.

Under this criterion, our list is again made up of Arcelor Mittal, Acerinox, Indra, Santander, Repsol, Mapfre, CIE Automotive, Telefónica and, furthermore, they are undervalued by PEG, Naturgy, Merlin Properties, BBVA and Inditex. Each one of these companies are cheap by ratios, both by PER and by CBA and therefore we expect an upward path in the medium / long term.

And, finally, to strengthen our analysis we ought to also review the ratio of Equity, PVC, or ratio of Book Value or Book Value. That is to say, this multiple that relates the purchase price to the funds contributed by the business's shareholders, long-term and non-enforceable financing for the company. This indicator should not be used in sectors such as property or SOCIMIS, by which this accounting data does not provide relevant information (for these companies the correct move to make should be to utilize the Net Value of the assets or NAV).

Well, in sectors where PVC analysis does work very well, the businesses most undervalued by this multiple in the Ibex 35 are, needless to say, banks, Sabadell, Caixabank, Santander, BBVA, Bankinter and an insurance company, Mapfre. Also undervaluation by book value for Arcelor Mittal, Repsol, Acerinox and Telefónica, thus achieving full undervaluation by our three criteria and, therefore, triple undervalued.