Editor’s note: This article was first published in February 2012. February 2012 market data: Bodaclick listed at €2.78 and then traded at €2.25, Gowex had risen 68%, and Imaginarium had lost 61% since its IPO. The MAB has since been renamed BME Growth (2020).
We rarely talk about the MAB (Mercado Alternativo Bursátil, Spain’s alternative stock market for smaller companies), although it may be a good idea to keep it in mind in 2012. It is home to Spanish companies, new and not so new, with supposed growth potential. Unlike companies listed on the continuous market, they are not under the same market pressure as the IBEX giants, for example.
Much of the advice we’ve given on investing in the stock market, based largely on the guidelines of great American investors such as Warren Buffett, could be much easier to apply to this kind of company, because it will be much easier for us to find out about the company’s plans, its management team, its business model and so on. Let’s say they can be more transparent companies for the small investor.
Large investment funds are already buying shares in these companies, and some fund managers even consider them a good safe haven during this volatile period in the markets, as long as we fully understand the type of business and business model of the company we’re going to invest in.
Some of the MAB favourites are Bodaclick, Zinkia, Gowex and Imaginarium, which, as it happens, are all companies whose share prices slumped, except for Gowex.
Bodaclick is a wedding planning company, currently the leader in the online wedding market. Its shares listed at €2.78 each. It now trades at €2.25, so it has lost about 20%. Bodaclick made an unsuccessful entry into the United States, where it eventually had to close. Now the company has the experience to avoid making the same mistake in Mexico, Brazil, Italy, Portugal and elsewhere. Good growth is forecast, so this company is expected to be among the profitable investments.
Gowex, on the other hand, is a company whose shares have risen by as much as 68%, as this telecoms company has specialised in areas where the big operators have no presence.
Imaginarium, after losing 61% on the stock market following its IPO, is now taking strategic positions with shops in the world’s major capitals, and its innovative design service for “premium” products is increasingly popular with consumers. It also no longer depends so much on the Spanish market.
With these companies you really will need to study the business plan and the strategy the company has in mind, and get used to the idea that you’ll be a partner in the company, because the MAB is not usually a playground for speculators. The shares are cheap and have little volatility, but if you trust the company’s plans for the future, it can be a profitable long-term investment.
Further reading
- Stock market investing for beginners
- Warren Buffett’s investment guidelines
- Warren Buffett’s speech in nine 10-minute videos
See also: Making money in a bear market, by Josef Ajram
Featured image: Jane White, CC BY-SA 3.0, via Wikimedia Commons.
