3 German Stocks That May Be Trading Below Intrinsic Value By Up To 35.5%

The German stock market has recently shown a strong performance, with the DAX index surging by 4.03% amid hopes for interest rate cuts and positive sentiment from China's economic stimulus measures. As investors navigate these evolving conditions, identifying stocks that may be trading below their intrinsic value becomes crucial, offering potential opportunities for those looking to capitalize on undervalued assets in the current economic landscape.

Top 10 Undervalued Stocks Based On Cash Flows In Germany

Name	Current Price	Fair Value (Est)	Discount (Est)
technotrans (XTRA:TTR1)	€16.90	€31.03	45.5%
init innovation in traffic systems (XTRA:IXX)	€36.50	€52.51	30.5%
Formycon (XTRA:FYB)	€51.20	€81.46	37.1%
SAP (XTRA:SAP)	€200.80	€277.43	27.6%
Schweizer Electronic (XTRA:SCE)	€4.02	€7.26	44.6%
elumeo (XTRA:ELB)	€2.14	€3.87	44.7%
LPKF Laser & Electronics (XTRA:LPK)	€8.76	€12.46	29.7%
Your Family Entertainment (DB:RTV)	€2.30	€4.37	47.3%
Vectron Systems (XTRA:V3S)	€12.15	€17.29	29.7%
Basler (XTRA:BSL)	€9.00	€13.96	35.5%

Click here to see the full list of 16 stocks from our Undervalued German Stocks Based On Cash Flows screener.

Let's review some notable picks from our screened stocks.

Basler (XTRA:BSL)

Overview: Basler Aktiengesellschaft develops, manufactures, and sells digital cameras for professional users both in Germany and internationally, with a market cap of €276.69 million.

Operations: The company's revenue primarily comes from its camera segment, generating €180.06 million.

Estimated Discount To Fair Value: 35.5%

Basler Aktiengesellschaft is trading at €9, significantly below its estimated fair value of €13.96, presenting a potential undervaluation based on cash flows. Despite reporting a net loss of €3.37 million for the first half of 2024, forecasts suggest strong earnings growth at 99.19% annually and profitability within three years. However, revenue growth is expected to be moderate at 14.6% per year, outpacing the German market average but still under 20%.

• The analysis detailed in our Basler growth report hints at robust future financial performance.
• Navigate through the intricacies of Basler with our comprehensive financial health report here.

Deutsche Pfandbriefbank (XTRA:PBB)

Overview: Deutsche Pfandbriefbank AG offers commercial real estate and public investment finance services in Europe and the United States, with a market cap of €797.44 million.

Operations: The company's revenue segments include Real Estate Finance (REF) at €223 million and Non-Core (NC) at €103 million.

Estimated Discount To Fair Value: 14.6%

Deutsche Pfandbriefbank is trading at €5.93, slightly below its estimated fair value of €6.94, indicating potential undervaluation based on cash flows. Despite a decline in net income to €40 million for the first half of 2024, earnings are forecast to grow significantly at 40.15% annually over the next three years, surpassing the German market average. However, concerns include lower profit margins and a high level of bad loans at 4.1%.

• Our earnings growth report unveils the potential for significant increases in Deutsche Pfandbriefbank's future results.
• Click here to discover the nuances of Deutsche Pfandbriefbank with our detailed financial health report.

Stemmer Imaging (XTRA:S9I)

Overview: Stemmer Imaging AG offers machine vision technology for various industrial and non-industrial applications globally, with a market cap of €313.95 million.

Operations: The company's revenue is primarily derived from its machine vision technology segment, totaling €126.23 million.

Estimated Discount To Fair Value: 18.6%

Stemmer Imaging is trading at €48.3, below its estimated fair value of €59.35, suggesting undervaluation based on cash flows. Despite recent earnings declines—net income fell to €5.11 million for the first half of 2024—the company is expected to see significant annual earnings growth of 23.2%, outpacing the German market average. However, volatility in share price and an unstable dividend track record present potential risks for investors considering this stock.

• According our earnings growth report, there's an indication that Stemmer Imaging might be ready to expand.
• Take a closer look at Stemmer Imaging's balance sheet health here in our report.

Summing It All Up

• Discover the full array of 16 Undervalued German Stocks Based On Cash Flows right here.
• Are these companies part of your investment strategy? Use Simply Wall St to consolidate your holdings into a portfolio and gain insights with our comprehensive analysis tools.
• Elevate your portfolio with Simply Wall St, the ultimate app for investors seeking global market coverage.

Want To Explore Some Alternatives?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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