Morgan Stanley | With oil up 30% YTD, fairly decent quarterly figures, dividends easily covered, with potential to grow and clearly above a market without upside, and with a process of positive profit revisions, we insist in dedicating half an hour to two ideas which are now being oversold and which have lost all they gained in Q1 and which their high dividend is clearly attractive in the market and which we believe could have returns of around 10% in the relatively short term. Two core ideas:
1. Repsol: trading below 9X PER for 2019, with a 6.5% yield coveted 170% with crude at 70$/b, 9% FCFY and a share price +3% YTD vs market and oil +30%,is within what we would consider a fairly intuitive purchase and
2.TOTAL: good delivery, best growth in upstream volume in sector, 10X PER, where we expect to see upgrades in accelerated profits from the sale of APC. In addition, it has one of the best downstream businesses and is well positioned to take advantage of LNG. 5.3% return by dividend (c150% covered in last 5 quarters), clearly above the historical average. Share value is c3% up YTD, and the same as commented on Repsol above.