Recent and fundamental context

Melia has been part of the IBEX35 for just over 2 years. In that time it has presented several ups and downs, depending on the index. First with the Spanish elections and the uncertainty and then after the French elections and the return of doubts with the Catalan crisis in the background and the motion of censure to the government of Rajoy as well as the decline of tourists on Spanish soil that is still very high .

Since then there have been many pretexts about a possible failure to the hotel sector, due to the recovery of the sector in Arab countries by the end of the conflict in Syria and the revolts of other countries.

If we look at the fundamental data of the company we see that the total debt has fallen by more than 50% in 4 years and that the benefits have been increasing, this increase being very high the year of going up to the IBEX35. The debt has dropped a lot and is the most important since it still weighs heavily in the company but it has been achieved that the current benefit ratio could be paid if the entire benefit was allocated in just three years, which was unthinkable 5 years ago.

This ability to overcome difficult moments is what makes Melia a good value to invest in the long term. In part, it is due to the good image of Spain abroad and the competitiveness in prices with European countries in its environment. Even so, due to the recovery of stability in the Arab countries and the fall in prices of countries such as Greece and Italy, the benefits may suffer a bit.

As a most recent achievement the decrease of 1 of the debt-EBITDA ratio.

A continuación presento los datos de fundamentales que me parecen más importantes:

• Capitalization
• NET benefit
• EBDITA
• Debt/Ebdita: : The best indicator for melia, a reduced debt from years ago.
• PER

Technical analysis

Its evolution until the moment of its entry into the IBEX has been quite good having doubled its value from the minimums at € 7 in 2016 to the maximums in 2017 at € 13 just at the peak of the IBEX with the shadows of a possible break in France of the EU cleared.

At present it is in a very interesting value, with a very high potential. It would be recommendable to start making purchases with a stop below € 6. While the odds of recovering the € 10 are high with a benefit of about 45%. In response to the long-term technician, the interval for trend changes to begin soon, specifically from December to May 2018.



If we look at the short term and correlate the value with the IBEX we will see how at the end of September the value would fall and the IBEX would go up. This is a reduction of the expectations of this summer and then there is the presentation of results that the analysts have not liked.

It is therefore a good sign to start entering the value.