Exploring Three Stocks On SIX Swiss Exchange With Intrinsic Value Discounts Ranging From 10.7% To 28.4%
editorial-team@simplywallst.com (Simply Wall St)
4 min read
The Swiss market recently experienced a slight downturn, closing marginally lower as investors showed restraint, lacking significant market-moving events. Amid these cautious trading conditions, identifying stocks that appear undervalued based on their intrinsic value could offer interesting opportunities for investors looking for potential in a somewhat subdued market environment.
Top 10 Undervalued Stocks Based On Cash Flows In Switzerland
Overview: Burckhardt Compression Holding AG is a global manufacturer and seller of reciprocating compressors, with a market capitalization of CHF 2.07 billion.
Operations: The company generates revenue through two primary segments: the Systems Division, which brought in CHF 642.81 million, and the Services Division, with revenues of CHF 339.15 million.
Estimated Discount To Fair Value: 28.4%
Burckhardt Compression Holding, with a current trading price of CHF 612, is considered undervalued based on discounted cash flow analysis, indicating a fair value estimate of CHF 854.47. Despite this potential for appreciation, the dividend coverage by free cash flows is weak. Recent financials show a robust year with sales rising from CHF 829.7 million to CHF 981.96 million and net income increasing to CHF 89.99 million from CHF 69.94 million last year, reflecting strong operational performance and earnings growth of 28.7%.
Overview: Sika AG is a specialty chemicals company that offers solutions for bonding, sealing, damping, reinforcing, and protecting in the building and automotive industries globally, with a market capitalization of approximately CHF 42.16 billion.
Operations: Sika generates CHF 9.45 billion from its construction industry products and CHF 1.78 billion from industrial manufacturing products.
Estimated Discount To Fair Value: 22.2%
Sika, priced at CHF262.8, appears undervalued by over 20%, with a fair value estimated at CHF337.64. Its earnings are set to increase by 12.7% annually, outpacing the Swiss market's 8.2%. Despite high debt levels and recent shareholder dilution, Sika's return on equity is expected to reach an impressive 20.3% in three years. Additionally, the company recently expanded operations in China and Peru, enhancing its production capabilities and market reach in critical regions.
Overview: Swatch Group AG is a global company that designs, manufactures, and sells finished watches, jewelry, and watch movements and components, with a market capitalization of CHF 8.84 billion.
Operations: The company generates revenue primarily through the sale of finished watches, jewelry, as well as watch movements and components.
Estimated Discount To Fair Value: 10.7%
Swatch Group, priced at CHF 170.4, is trading below our fair value estimate of CHF 190.83, indicating a potential undervaluation. Although its dividend coverage by free cash flows is weak, the company's earnings are expected to grow by 21.43% annually, surpassing the Swiss market forecast of 8.2%. However, recent financials show a decline with half-year sales dropping to CHF 3.45 billion from CHF 4.02 billion last year and net income falling significantly to CHF 136 million from CHF 486 million.
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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.
Companies discussed in this article include SWX:BCHNSWX:SIKASWX:UHR and
