Swedish Exchange Highlights H & M Hennes & Mauritz Among 3 Stocks Estimated Below Fair Value

As global markets face volatility due to escalating tensions in the Middle East and fluctuating oil prices, European indices, including those in Sweden, have seen cautious investor sentiment. Amidst this uncertainty, identifying undervalued stocks can be a strategic approach for investors seeking opportunities; such stocks may offer potential value by trading below their estimated fair value despite broader market challenges.

Top 10 Undervalued Stocks Based On Cash Flows In Sweden

Name	Current Price	Fair Value (Est)	Discount (Est)
CTT Systems (OM:CTT)	SEK261.00	SEK491.75	46.9%
Concentric (OM:COIC)	SEK215.50	SEK406.08	46.9%
Lindab International (OM:LIAB)	SEK269.60	SEK526.45	48.8%
Jetpak Top Holding (OM:JETPAK)	SEK107.00	SEK213.88	50%
Litium (OM:LITI)	SEK8.20	SEK16.25	49.5%
Wall to Wall Group (OM:WTW A)	SEK56.40	SEK105.35	46.5%
Dometic Group (OM:DOM)	SEK58.05	SEK107.66	46.1%
Mentice (OM:MNTC)	SEK27.90	SEK51.00	45.3%
BHG Group (OM:BHG)	SEK14.24	SEK26.64	46.5%
Bactiguard Holding (OM:BACTI B)	SEK46.20	SEK86.03	46.3%

Click here to see the full list of 42 stocks from our Undervalued Swedish Stocks Based On Cash Flows screener.

Let's uncover some gems from our specialized screener.

H & M Hennes & Mauritz (OM:HM B)

Overview: H & M Hennes & Mauritz AB (publ) is a global retailer offering clothing, accessories, footwear, cosmetics, home textiles, and homeware for women, men, and children with a market cap of approximately SEK 274.11 billion.

Operations: The company generates revenue primarily from its apparel segment, which accounts for SEK 234.94 billion.

Estimated Discount To Fair Value: 16.6%

H&M Hennes & Mauritz is trading at SEK170.3, below its estimated fair value of SEK204.24, suggesting potential undervaluation based on cash flows. Earnings are forecast to grow at 17% annually, outpacing the Swedish market's 15.8% growth rate, though recent quarterly earnings showed a decline in net income and sales compared to last year. Despite introducing new collections like Atelier, challenges remain with dividend coverage by earnings being inadequate at present levels.

• Insights from our recent growth report point to a promising forecast for H & M Hennes & Mauritz's business outlook.
• Unlock comprehensive insights into our analysis of H & M Hennes & Mauritz stock in this financial health report.

Humble Group (OM:HUMBLE)

Overview: Humble Group AB (publ) refines, develops, and distributes fast-moving consumer products in Sweden and internationally, with a market cap of approximately SEK5.61 billion.

Operations: The company's revenue segments include Future Snacking at SEK950 million, Sustainable Care at SEK2.30 billion, Quality Nutrition at SEK1.53 billion, and Nordic Distribution at SEK2.67 billion.

Estimated Discount To Fair Value: 37.3%

Humble Group, trading at SEK12.57, is undervalued by over 20% against its fair value of SEK20.05 based on discounted cash flow analysis. Recent earnings showed sales growth to SEK1.86 billion in Q2 2024 and a net income turnaround to SEK32 million from a loss last year. Forecasts indicate revenue will grow annually at 11.5%, surpassing the Swedish market's average, although return on equity remains low at an estimated 8.7%.

• Our expertly prepared growth report on Humble Group implies its future financial outlook may be stronger than recent results.
• Navigate through the intricacies of Humble Group with our comprehensive financial health report here.

MilDef Group (OM:MILDEF)

Overview: MilDef Group AB (publ) develops, manufactures, and sells rugged IT solutions and special electronics primarily for the security and defense sectors, with a market cap of SEK3.60 billion.

Operations: The company's revenue is primarily derived from its Computer Hardware segment, which generated SEK1.11 billion.

Estimated Discount To Fair Value: 39.8%

MilDef Group, with a current price of SEK90.1, is significantly undervalued compared to its fair value estimate of SEK149.78 based on discounted cash flow analysis. The company's earnings are projected to grow at 47.4% annually, outpacing the Swedish market's average growth rate. However, recent financials show a decline in profit margins from 6.2% to 3.9%. Recent contracts with Danish and Norwegian defense agencies bolster future revenue prospects despite these margin pressures.

• Our earnings growth report unveils the potential for significant increases in MilDef Group's future results.
• Dive into the specifics of MilDef Group here with our thorough financial health report.

Next Steps

• Reveal the 42 hidden gems among our Undervalued Swedish Stocks Based On Cash Flows screener with a single click here.
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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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