Mota-Engil, Portugal’s largest construction firm, is currently undervalued, with its shares expected to be worth double their present market price, according to its chief executive officer.
Mota-Engil has dropped 27% since reporting its first-half results on August 28, while short sellers have increased their positions against the stock. As of September 2, Muddy Waters Capital Domino Master Fund reported holding a short position of 1.99 million shares, representing 0.65% of the company’s total stock.
In an interview on Monday, CEO Carlos Mota dos Santos stated, “What transpired between the end of August and the month of September is a phenomenon that makes no sense to us and has to do with short positions that have no fundamental basis.” According to him, the stock is “certainly worth more than twice its current value.”
According to data gathered by Bloomberg, Mota-Engil’s market value was €776.8 million on Monday, when it closed at €2.53 per share, down 0.6%.
Santos expressed confidence that the company will sustain a “strong” order book, benefiting from significant railway and road projects across Africa, Latin America, and Portugal. Just last week, the company secured a contract to construct the first section of high-speed rail in Portugal.
“Our focus remains on showcasing Mota-Engil’s true value through our work,” Santos stated, noting that Muddy Waters has never reached out to Mota-Engil. “We are unsure of the reasons behind their decision to take this short position, but we are hopeful this situation will soon come to an end.”
