The Swedish stock market has been influenced by global economic trends, including the recent U.S. Federal Reserve rate cut, which has created a cautious yet optimistic investment environment. As investors seek opportunities in this evolving landscape, identifying stocks that are trading below their fair value can be particularly advantageous. In this context, understanding what makes a stock undervalued is crucial. Factors such as strong fundamentals, resilient business models, and favorable industry conditions can indicate potential for growth despite current market uncertainties.

Top 10 Undervalued Stocks Based On Cash Flows In Sweden

Click here to see the full list of 45 stocks from our Undervalued Swedish Stocks Based On Cash Flows screener.

We're going to check out a few of the best picks from our screener tool.

Dometic Group

Overview: Dometic Group AB (publ) provides mobile living solutions in food and beverage, climate, power and control, and other applications with a market cap of SEK 18.48 billion.

Operations: The company's revenue segments include Marine (SEK 6.25 billion), Global Ventures (SEK 5.88 billion), Land Vehicles APAC (SEK 4.52 billion), Land Vehicles EMEA (SEK 8.11 billion), and Land Vehicles Americas (SEK 5.00 billion).

Estimated Discount To Fair Value: 45.7%

Dometic Group is trading at SEK57.85, significantly below its estimated fair value of SEK106.57, making it highly undervalued based on discounted cash flow analysis. Despite a high level of debt and slower revenue growth (1.7% per year) compared to earnings growth (25% per year), the company’s earnings are forecast to grow faster than the Swedish market average. Recent Q2 2024 results showed a decline in sales and net income compared to last year, highlighting potential risks.

• Our expertly prepared growth report on Dometic Group implies its future financial outlook may be stronger than recent results.

• Click here to discover the nuances of Dometic Group with our detailed financial health report.

Securitas

Overview: Securitas AB (publ) offers security services across North America, Europe, Latin America, Africa, the Middle East, Asia, and Australia with a market cap of SEK74.34 billion.

Operations: The company's revenue segments are as follows: Securitas North America at SEK63.72 billion, Security Services Europe (including Mobile & Monitoring) at SEK68.62 billion, and Securitas Ibero-America at SEK14.67 billion.

Estimated Discount To Fair Value: 49.8%

Securitas AB is trading at SEK129.75, significantly below its estimated fair value of SEK258.39, making it highly undervalued based on discounted cash flow analysis. Recent Q2 2024 results showed revenue increased to SEK 40.64 billion from SEK 39.91 billion a year ago, with net income rising to SEK 1.31 billion from SEK 1.18 billion. Despite lower profit margins and debt concerns, earnings are forecast to grow significantly at 40.9% per year, outpacing the Swedish market average of 15%.

• Our earnings growth report unveils the potential for significant increases in Securitas' future results.

• Dive into the specifics of Securitas here with our thorough financial health report.

Troax Group

Overview: Troax Group AB (publ) produces and sells mesh panels through its subsidiaries across the Nordic region, the United Kingdom, North America, Continental Europe, and internationally, with a market cap of SEK12.42 billion.

Operations: The company's revenue from mesh panels amounts to €270.77 million.

Estimated Discount To Fair Value: 12.2%

Troax Group AB, trading at SEK207.5, is undervalued based on its fair value estimate of SEK236.38. Despite recent earnings showing a decline in net income to EUR 7.5 million from EUR 9.1 million year-over-year for Q2 2024, the company's revenue grew to EUR 71.9 million from EUR 68.5 million in the same period. Earnings are forecast to grow significantly at 21.87% per year, outpacing the Swedish market's average growth rate of 15%.

• Our growth report here indicates Troax Group may be poised for an improving outlook.

• Click to explore a detailed breakdown of our findings in Troax Group's balance sheet health report.

Where To Now?

• Take a closer look at our Undervalued Swedish Stocks Based On Cash Flows list of 45 companies by clicking here.

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Seeking Other Investments?

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• 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.

Companies discussed in this article include OM:DOM OM:SECU B and OM:TROAX.

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