MIPS, the MAPFRE Behavioral Fund company that protects your brain
Luis García, CFA, MAPFRE AM Manager, recently cited this company at the online event “Buscando Valor” (Searching for Value) organized by Rankia. MIPS carries the greatest value in the MAPFRE AM Behavioral Fund portfolio — a mutual fund managed by this expert and based on the behavioral economy. Its main objective is to exploit the inefficiencies caused by market participant behavior, and it seeks to invest primarily in companies that have a simple and cash-generating business model, a sustainable competitive advantage, a low level of debt and a strong management team. “MIPS fulfills all of the qualities we’re seeking for this fund,” García explained.
The company is currently listed at 50 times its estimated market profit for 2021, so doubts may arise over whether it truly is a value investment. “If an investment opportunity arises at a company with capacity for growth, we don’t mind paying a higher multiplier. Profitable growth is part of the intrinsic value of a company. It has a large capacity for growth in other markets. The total market that MIPS could aspire to reach is 400 million units a year,” García noted, recalling how bicycle sales shot up to record levels during the pandemic.
MIPS is not the only sports company in which the fund invests. It’s also one of the few funds in Europe with significant exposure to soccer teams. Specifically, its portfolio comprises Ajax, Olympique Lyonnais and Borussia Dortmund. it has part of its assets under management invested in Adidas or other companies, such as Technogym. “When we were setting up the portfolio, we wondered what was most likely to be the reality in 10 years’ time: that we’re still driving cars, still using Facebook or still playing sport. The safest bet is that we’ll continue to play sport, and that’s why we’ve invested in these companies. The third option seems the most likely, making the sports industry attractive to us for long-term investment,” García concluded.