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Amidst a backdrop of political stability and modest gains across major European indices, the German market presents intriguing possibilities for investors looking to capitalize on undervalued stocks. With Germany's DAX index recently up by 1.32%, discerning investors might find attractive opportunities in stocks that are currently trading below their intrinsic values, especially in a market environment characterized by cautious optimism and economic recalibration.
Top 10 Undervalued Stocks Based On Cash Flows In Germany
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Stabilus (XTRA:STM) | €43.80 | €80.04 | 45.3% |
| technotrans (XTRA:TTR1) | €18.25 | €29.63 | 38.4% |
| PSI Software (XTRA:PSAN) | €22.80 | €43.51 | 47.6% |
| Stratec (XTRA:SBS) | €45.05 | €82.15 | 45.2% |
| Wolftank-Adisa Holding (XTRA:WAH) | €11.30 | €22.46 | 49.7% |
| SBF (DB:CY1K) | €2.96 | €5.73 | 48.4% |
| CHAPTERS Group (XTRA:CHG) | €24.40 | €46.76 | 47.8% |
| Rubean (DB:R1B) | €5.90 | €11.00 | 46.4% |
| MTU Aero Engines (XTRA:MTX) | €245.20 | €418.77 | 41.4% |
| Your Family Entertainment (DB:RTV) | €2.56 | €4.52 | 43.4% |
Let's dive into some prime choices out of from the screener.
adesso
Overview: Adesso SE, an IT services provider operating in Germany, Austria, Switzerland, and internationally, has a market capitalization of approximately €588.78 million.
Operations: The company generates revenue primarily through two segments: IT Services (€1.31 billion) and IT Solutions (€119.88 million).
Estimated Discount To Fair Value: 12.8%
Adesso, currently trading at €90.3, is valued below our fair value estimate of €103.59, indicating potential undervaluation based on discounted cash flows. Despite a forecasted low return on equity of 13.6% in three years, adesso is expected to grow earnings by 37.96% annually and become profitable within the same period. Revenue growth projections stand at 11.9% per year, outpacing the German market's average of 5.5%. However, its ability to cover interest payments with earnings is weak.
adidas
Overview: Adidas AG operates globally, designing, developing, producing, and marketing athletic and sports lifestyle products across multiple regions, with a market capitalization of approximately €40.32 billion.
Operations: Adidas generates €3.20 billion in revenue from Greater China, €2.31 billion from Latin America, and €5.16 billion from North America.
Estimated Discount To Fair Value: 33.6%