Swedish Exchange Highlights Three Stocks Seen As Trading Below Estimated Intrinsic Values

Amidst a backdrop of fluctuating global markets, the Swedish stock market presents intriguing opportunities for investors seeking value. With recent economic data influencing market dynamics, certain stocks on the Swedish exchange appear to be trading below their estimated intrinsic values, potentially offering attractive entry points for discerning investors.

Top 10 Undervalued Stocks Based On Cash Flows In Sweden

Name	Current Price	Fair Value (Est)	Discount (Est)
RVRC Holding (OM:RVRC)	SEK45.76	SEK86.78	47.3%
Gränges (OM:GRNG)	SEK138.50	SEK259.34	46.6%
Truecaller (OM:TRUE B)	SEK35.50	SEK70.71	49.8%
RaySearch Laboratories (OM:RAY B)	SEK145.00	SEK277.86	47.8%
Nolato (OM:NOLA B)	SEK60.50	SEK115.62	47.7%
Dometic Group (OM:DOM)	SEK70.35	SEK129.69	45.8%
TF Bank (OM:TFBANK)	SEK268.00	SEK517.40	48.2%
Sinch (OM:SINCH)	SEK23.22	SEK43.40	46.5%
Image Systems (OM:IS)	SEK1.505	SEK2.84	47%
Bactiguard Holding (OM:BACTI B)	SEK71.40	SEK132.42	46.1%

Click here to see the full list of 52 stocks from our Undervalued Swedish Stocks Based On Cash Flows screener.

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

TF Bank (OM:TFBANK)

Overview: TF Bank AB (publ) is a digital bank that offers consumer banking services and e-commerce solutions via its proprietary IT platform, with a market capitalization of SEK 5.76 billion.

Operations: The bank generates revenue through three primary segments: credit cards (SEK 511.24 million), consumer lending (SEK 607.24 million), and e-commerce solutions excluding credit cards (SEK 363.28 million).

Estimated Discount To Fair Value: 48.2%

TF Bank, with a current trading price of SEK 268, is significantly below our fair value estimate of SEK 517.4, highlighting its undervaluation based on cash flows. Recent earnings show robust growth with net interest income and net income for the first half of 2024 rising to SEK 911.53 million and SEK 210.54 million respectively. Despite a high bad loans ratio at 10.6%, TF Bank's revenue and earnings growth are projected to substantially outpace the Swedish market averages, with expected annual revenue growth at an impressive rate above 20% and earnings forecasted to grow by approximately 27.76% annually over the next few years.

• Our comprehensive growth report raises the possibility that TF Bank is poised for substantial financial growth.
• Click to explore a detailed breakdown of our findings in TF Bank's balance sheet health report.

Truecaller (OM:TRUE B)

Overview: Truecaller AB operates globally, developing and publishing mobile caller ID applications for both individuals and businesses in regions including India, the Middle East, and Africa, with a market capitalization of SEK 12.28 billion.

Operations: The company generates revenue primarily through its Communications Software segment, which amounted to SEK 1.78 billion.

Estimated Discount To Fair Value: 49.8%

Truecaller, priced at SEK 35.5, is valued well below our fair value estimate of SEK 70.71, indicating significant undervaluation based on discounted cash flows. The company's earnings have expanded by 52.4% annually over the last five years and are expected to grow by 17.6% annually moving forward, outpacing the Swedish market's forecasted growth. Additionally, Truecaller's recent strategic initiatives include launching Truecaller Fraud Insurance in India and a follow-on equity offering raising SEK 517.5 million, which could support future growth trajectories and enhance user security features globally.

• Upon reviewing our latest growth report, Truecaller's projected financial performance appears quite optimistic.
• Unlock comprehensive insights into our analysis of Truecaller stock in this financial health report.

Volvo Car AB (publ.) (OM:VOLCAR B)

Overview: Volvo Car AB (publ.) is a global automaker based in Sweden, specializing in the design, development, manufacturing, and sale of passenger cars with a market capitalization of approximately SEK 95.73 billion.

Operations: The company's primary revenue is generated from its automotive business, totaling SEK 397.52 billion.

Estimated Discount To Fair Value: 20.3%

Volvo Car AB, with a current trading price of SEK 32.13, appears undervalued against our fair value estimate of SEK 40.29, reflecting potential underpricing based on cash flows. Despite forecasts indicating modest return on equity at 13.9% in three years, the company's revenue and earnings growth are promising. Expected to grow earnings by 23.65% annually over the next three years—surpassing Swedish market projections—Volvo shows robust financial health, especially considering its recent sales uptick across key markets and successful green bond issuance of €500 million.

• The growth report we've compiled suggests that Volvo Car AB (publ.)'s future prospects could be on the up.
• Click here to discover the nuances of Volvo Car AB (publ.) with our detailed financial health report.

Taking Advantage

• Unlock our comprehensive list of 52 Undervalued Swedish Stocks Based On Cash Flows by clicking here.
• Already own these companies? Bring clarity to your investment decisions by linking up your portfolio with Simply Wall St, where you can monitor all the vital signs of your stocks effortlessly.
• Enhance your investing ability with the Simply Wall St app and enjoy free access to essential market intelligence spanning every continent.

Looking For Alternative Opportunities?

• 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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