Election worries roiled Italian markets this week, with the Milan Stock Exchange down 0.42% Monday afternoon and 4.1% for the last five trading days. The country’s market trailed the S&P 500’s 1.08% gain Monday and 2.12% loss for the last five trading days.
Rule of Italy has been left in limbo after no party received enough parliament seats in Sunday’s election to lead alone. The populist upheaval in the nation’s politics sparked concern among other members of the EU and market participants. Italy’s anti-establishment Five Star Movement (M5S) won the most seats, with 32.6% of the vote, and a center-right group of parties captured 37% of the vote. In that coalition, a nationalist, anti-immgration party, League, led with 17.4% of votes.
Government negotiations over who will officially take control remain underway, leaving the country’s path forward uncertain.
The third-largest economy in the eurozone, Italy’s stock market has struggled to get back on track after the Great Recession but has made progress. In the past five years, the Milan Stock Exchange rose 35.32%. Its gross domestic product has also been gaining steam. After turning as low as negative 0.1% in 2014, it grew 0.3% in the fourth quarter and 0.4% in the third, year-over-year.
Other areas, such as employment, have been more lackluster. The unemployment rate in January was 11.1%, up 0.2% from December 2017, with the number of unemployed up 2.3%. The government’s debt also increased to 2.26 trillion euros in 2017, totaling 131.5% of GDP.
Some of the stocks in the country have appealed to investors tracked by GuruFocus. The ones with recent buys are: Intesa Sanpaolo (MIL:ISP, Financial), Salvatore Ferragamo SpA (MIL:SFER, Financial), Azimut Holding SpA (MIL:AZM, Financial), Banco BPM SpA (MIL:BAMI, Financial) and Davide Compari-Milano SpA (MIL:CPR, Financial).
Intesa Sanpaolo (MIL:ISP, Financial)
Intesa Sanpaolo focuses on private and investment banking. It has branches in Central and Eastern Europe, the Middle East and Africa.
Four investors tracked by GuruFocus recently purchased shares of the company: David Herro (Trades, Portfolio), Bestinfond (Trades, Portfolio), Invesco European Growth Fund (Trades, Portfolio) and Signature Select Canadian Fund (Trades, Portfolio).
Intesa Sanpaolo has a market cap of 50.59 billion euros; its shares were traded around 3.01 euros Monday with a P/E ratio of 7.53 and P/S ratio of 3.47. The trailing 12-month dividend yield of Intesa Sanpaolo stocks is 5.92%. The forward dividend yield of Intesa Sanpaolo stocks is 6.75%.
Salvatore Ferragamo SpA (MIL:SFER, Financial)
Salvatore Ferragamo makes luxury, mostly leather goods, with almost half of its revenue derived from the Asia-Pacific region.
The Oakmark International Small Cap Fund established a position in the company in the fourth quarter, buying 1.604 million shares.
Salvatore Ferragamo SpA has a market cap of 3.72 billion euros; its shares were traded around 22.03 euros Tuesday with a P/E ratio of 35.54 and P/S ratio of 3.70. The trailing 12-month dividend yield of Salvatore Ferragamo SpA stocks is 2.09%. The forward dividend yield of Salvatore Ferragamo Spa stocks is 2.09%. Salvatore Ferragamo SpA had an annual average earnings growth of 14.70% over the past five years.
Azimut Holding SpA (MIL:AZM, Financial)
Azimut Holding SpA is an asset management and financial advisory services company. In the fourth quarter, the Oakmark International Small Cap fund started a position in the company with 6.101 million shares.
Azimut Holding SpA has a market cap of 2.28 billion euros; its shares were traded around 17.51 euros with a P/E ratio of 10.36 and P/S ratio of 3.61. The trailing 12-month dividend yield of Azimut Holding SpA stocks is 5.71%. The forward dividend yield of Azimut Holding SpA stocks is 14.28%. Azimut Holding SpA had an annual average earnings growth of 9.60% over the past 10 years.
Banco BPM SpA (MIL:BAMI, Financial)
Formed in 2007, Banco BPM SpA engages in banking services, from retail to investment banking.
In the fourth quarter, the Signature Select Canadian Fund (Trades, Portfolio) boosted its holding in the company by 30.55% to 1,069,774 shares.
Banco BPM SpA has a market cap of 4.35 billion euros; its shares were traded around 2.87 euros with a P/E ratio of 8.97 and P/S ratio of 2.98.
Davide Compari-Milano SpA (MIL:CPR, Financial)
Davide Compari-Milano SpA operates in the alcoholic and non-alcoholic beverages industry, manufacturing spirits, wines and soft drinks.
Davide Campari-Milano SpA has a market cap of 6.72 billion euros; its shares were traded around 5.83 euros with a P/E ratio of 24.29 and P/S ratio of 4.13. The trailing 12-month dividend yield of Davide Campari-Milano Spa stocks is 1.55%. The forward dividend yield of Davide Campari-Milano SpA stocks is 0.86%. Davide Campari-Milano SpA had an annual average earnings growth of 5.90% over the past 10 years. GuruFocus rated Davide Campari-Milano SpA the business predictability rank of 4-star.
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