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As European markets grapple with concerns over U.S. trade tariffs and monetary policy uncertainties, the pan-European STOXX Europe 600 Index has recently experienced a decline, reflecting broader economic apprehensions. In such an environment, identifying undervalued stocks can be crucial for investors seeking opportunities; these stocks often exhibit strong fundamentals or potential for growth that may not yet be fully recognized by the market.
Top 10 Undervalued Stocks Based On Cash Flows In Europe
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Telefonaktiebolaget LM Ericsson (OM:ERIC B) | SEK83.02 | SEK164.54 | 49.5% |
| Wienerberger (WBAG:WIE) | €35.24 | €69.57 | 49.3% |
| CTT Systems (OM:CTT) | SEK228.00 | SEK443.67 | 48.6% |
| Net Insight (OM:NETI B) | SEK4.92 | SEK9.58 | 48.6% |
| Storytel (OM:STORY B) | SEK90.85 | SEK180.37 | 49.6% |
| Star7 (BIT:STAR7) | €6.30 | €12.42 | 49.3% |
| InTiCa Systems (XTRA:IS7) | €4.22 | €8.25 | 48.9% |
| Fodelia Oyj (HLSE:FODELIA) | €7.12 | €13.91 | 48.8% |
| MilDef Group (OM:MILDEF) | SEK208.50 | SEK405.57 | 48.6% |
| Galderma Group (SWX:GALD) | CHF96.38 | CHF189.25 | 49.1% |
Let's take a closer look at a couple of our picks from the screened companies.
Borregaard
Overview: Borregaard ASA develops, produces, and markets specialized biomaterials and biochemicals globally, with a market cap of NOK17.56 billion.
Operations: The company's revenue segments consist of Bio Materials at NOK2.62 billion, Bio Solutions at NOK4.24 billion, and Fine Chemicals at NOK799 million.
Estimated Discount To Fair Value: 39.6%
Borregaard is trading at NOK176, significantly below its estimated fair value of NOK291.48, suggesting it may be undervalued based on cash flows. Analysts forecast earnings growth of 14.6% annually, outpacing the Norwegian market's 8%. Recent financials show Q4 sales increased to NOK1.74 billion from NOK1.61 billion year-over-year, though full-year net income slightly declined to NOK823 million from NOK870 million. The proposed dividend for 2024 is set at NOK4.25 per share.
AddLife
Overview: AddLife AB (publ) and its subsidiaries supply equipment, consumables, and reagents to the healthcare sector, research institutions, educational entities, and the food and pharmaceutical industries with a market cap of SEK18.21 billion.
Operations: The company's revenue is primarily derived from its Labtech segment, which generated SEK3.80 billion, and its Medtech segment, which contributed SEK6.50 billion.