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Berkeley and Abengoa, the speculation to power: "It is a danger to get into these titles"


If there have been two protagonists this week, they have been Berkeley and Abengoa. The mining company has emerged as the best value on the Spanish stock market, with a rally of around 160% in the year, while class B securities – those held by minority shareholders – of the industrial group lead the side negative of the table and fall around 60% in 2020. Unleashed speculation has catapulted Berkeley and the risk of bankruptcy has sunk Abengoa. Much will continue to be said about both companies in the coming days. At the moment, they are indisputable protagonists, for better and for worse.

The Australian Stock Exchange has asked Berkeley for explanations this week due to the very strong increases. The company has shot up 100% in these last five days, highlighting the increases of 31% on Monday and 40% on Wednesday. The company has said that there are no 'developments on the front' beyond that the project for its uranium mine in Retortillo (Salamanca) continues, and the fact that the price of the uranium spot – due to the lower supply due to the impact of the coronavirus – has risen more than 30% so far this year.

Both reasons they seem insufficient to explain both the weekly increases and the rally registered by the company in the year, a company that is usually subject to stock speculation. "The market only works as a result of the number of tweets that come out when values ​​start to heat up. There are tables that are dedicated to heating these titles, get out and in, "says a market expert consulted by Bolsamanía.

Since the March lows, that is, in just three months, Berkeley has shot up nearly 500% with a very high negotiated volume. The president of the company, Francisco Bellón, considers that his star project in Salamanca cannot be stopped by ideology. "This plan is very important for job creation and economic activity in the Salamanca region," he declared this week.

In the case of Abengoa, over the last few days it has been published that is on the verge of filing its second bankruptcy in five years, which in this case, given the complexity of the current situation at a general level and at a particular level, would inevitably lead to bankruptcy. If this scenario is fulfilled, Abengoa would be the second listed company that would end up liquidated this year after the closure of Sniace in February. Also, it would be the largest business bankruptcy produced during the current Covid-19 pandemic in Spain.

Abengoa's class B shares have lost half their value this week, while class A shares have dropped 35%. Bolsamanía experts consider it to be a "danger getting into this type of titles". They insist that these values ​​should be avoided, only indicated for highly speculative investor profiles. Abengoa is also listed at very low prices (0.004 euros), which makes it even less recommendable. "The liquid values ​​that people should enter are those that quote at least 5 euros and have a volume of more than 100,000 titles per day"advises César Nuez, an analyst at Bolsamanía and head of Trader Watch.

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