The title of this independent European leader in multi-technical services remains affordable in terms of valuation and the message from management is reassuring for 2021. A turbo call allows you to take an interest in the file with leverage.
Spie is part of La Lettre’s French equity portfolio at a cost price of 19.60 euros, which is admittedly higher than current prices, without this worrying us. We are indeed very confident in the continued catching up of the action of this independent European leader in multi-technical services in the fields of energy and communications and in its ability from 2021 to exceed the threshold of 20 euros. Why? When the confinement was lifted, the company demonstrated an ability to reconnect with a dynamic close to that of before the crisis and its essentially variable cost structure enabled it to limit the erosion of its profitability (half a point to 5.6 % in the third quarter for an organic decrease of 1.8%). Despite the virulence of the health crisis, management was not at all worried about the end of the year and was counting on a second half-year close to that of last year with a contraction of half a point in the current operating margin. . For 2021, the objective for Spie is to return to pre-crisis profitability of 6%. Finally, the generation of free cash flow will be used to continue deleveraging the company with a multiple of 3 times the gross operating surplus at the end of the year. Outlook valued at 15.7 times the estimated profits for this year and 12.1 times those of 2021 (against an average of 13.2 times over the period 2015-2019).
The Spie share must not fall below 14 euros
The record can be played with a lever by means of a turbo call. The one selected is issued by Société Générale (code: DE000SD04GM5) with no expiry date and with a security threshold of 13.97 euros below which the share must not fall. Otherwise, the turbo will lose almost all of its value. To limit this risk, we have voluntarily chosen a certificate whose safety threshold is far enough from the share price to give the time necessary to unwind the position in the event of an unfavorable change in the share. Meanwhile, the call has a leverage of 4 times. So in the event of a further rise in Spie shares to 19.50 euros for example, the turbo will gain 48.3%. But conversely, it will lose 43.7% of its value if the stock falls to 15.50 euros.
Our advice: buy a Spie turbo call (code: DE000SD04GM5) issued by Société Générale; term: unlimited; level of funding: 13.1477 euros; security threshold: 13.97 euros; parity: 5 calls for 1 share; price: 0.87 euro; portion: 1.