Of the 41 stocks that are traded very or somewhat frequently on the Colombian stock exchange none is trading above two, three or four times its book value, as is common internationally; only seven do it above once and the remaining 34 do it below its book value, so it can be said that the Colombian market is cheap, but there are few buyers.
(Read: Colombian actions best and worst valued in the Stock Exchange).
And on the other hand, despite the public acquisition offers that, from the end of November and until less than a month ago, advanced the Gilinski Group on Nutresa and Grupo Sura, the Colombian Stock Exchange market registers a devaluation of its main MSCI Colcap index of 10.71%.
most of titles show falls of up to 41.54% as in the case of Mineros, 40.17% as in Banco de Bogotá, 39.24% as in Acerías Paz del Río or 37.81% as in Cementos Argos.
And instead, only five papers show appreciation: Bancolombia of 1.82%El Cóndor 20.99%, Banco AV Villas Preferential 23.12%, Grupo Sura 28.67% and Grupo Nutresa 34.46%.
Without any in-depth analysis, for a stock to trade below its book value, in generally means it’s undervalued and that it is negotiated above is that it is overvalued, but in this there are exceptions.
Analysts consulted assure that what must be looked at are the future flows of the companies in which their expansion plans, investments, international market, alliances, and purchasesamong other aspects and obviously the sector in which they operate.
In the oil sector, it is very common for company shares to be traded at up to four times their book value, and in the case of Ecopetrol and Canacol are traded with indicators of 1.18 and 1.96 times their book value.
In the energy sector, it is common for companies to trade more than twice their book value, and in the case of ISA, its price is 1.54 times its book value, and in the cases of Grupo Energía Bogotá and Celsia, its indicators are 1.09 and 0.74 times.
(Also: Analysts raise GDP growth prospects to 6.4% for 2022).
In the case of the country’s banks and financial entities that are listed on the country’s stock market, it is common for them to be traded at two or three times their book value and, for example, Bancolombia is trading at 1.07 timesBHI at 0.96 times, Banco de Bogotá at 0.56 times or Corficolombiana at 0.65 times.
The effect on offers
With the takeover bids of the Gilinski Group, the Nutresa share, which before the operation, its market value ratio compared to its book price was 1.27 times, subsequently reached 1.93 times, and according to analyst Andrés Moreno Jaramillo “it is a fair price”. For its part, the Grupo Sura title before the takeover bid had a market price ratio compared to the book value of just 0.47 times, it went to 0.90 times.
“One of the parameters of a stock market investor is to look for a company with a good financial situation.”.
BRIEFCASE
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