Is It Time To Bet On Stocks From Europe?

According to Goldman Sachs and Bank of America, hedge funds and mutual funds are paying close attention to European stocks, increasing their holdings relative to the region to the highest levels in 4 years. Bloomberg published an article about this.

The S&P 500 is at a historical maximum, and the main growth driver is the revaluation of Big Tech companies amid the boom in AI technologies. And there is concern that these companies have already been fairly valued. We rather take the same point of view. Of the 10 largest US information technology stocks by market cap, only 3 are undervalued according to Eyestock historical valuation methodology. These companies are Salesforce (CRM), Adobe (ADBE) and Cisco Systems (CSCO). There is only one such company in the second ten — ServiceNow (NOW). Not much.

European stock indices in terms of market cap to net profit ratios are now clearly cheaper than their American counterparts, and there is an opinion that you can bet on them. Some investors are generally afraid of a repeat of the dot-com bubble and are looking for a safe haven.

In fact, the S&P500 has outperformed European indices by at least 20% since 2020. But let’s not forget about the relatively good macroeconomic situation compared to the UK or Germany, which are already in recession. However, Peter Oppenheimer of Goldman Sachs is inclined to believe that they will be able to avoid a protracted recession, and that the best opportunities for investors will open up outside the United States.

But there is a problem. We recently covered the top European companies by capitalization: Ferrari, AMSL, Hermes, and Novo Nordisk. All of them are already trading above their average value levels, and some even with a serious premium to the maximum price-to-earnings ratio values. So is Europe really cheaper than the US? Let’s break it down by digging a little deeper to find some truly undervalued viable investments on the European stock market.

We have carefully collected for you the 20 best-undervalued stocks from Europe according to the Eyestock rating here. Next, we’ll take a closer look at companies with a market cap over $3b, which are the most undervalued relative to the average price-to-earnings ratio over the past 5 years for these companies. And of course, all of the companies must have an Eyestock rating above 100% in order to be a viable investment.

Genmab A/S (Nasddaq Copenhagen: GMAB.CO)
undervalued compared to the average value by 21%

Genmab is another great Danish company from the Healthcare sector, which specializes in the creation and development of antibody therapeutics for the treatment of cancer. The stock has an average annual return of 22.9% and a beta correlation with the index of 0.5, which is an added bonus for conservative investors. We wrote about understanding the beta coefficient quite recently.

Evolution AB (Nasdaq Stockholm: EVO.ST)
undervalued compared to the average value by 31%

The Swedish company develops, manufactures, markets and licenses casino business solutions for gaming operators as B2B supplier mainly in Europe and Asia and has been listed on the stock exchange since 2015. The company’s annual revenue for 2023 exceeded 1 billion euros! With a rating of 154%, the company shares 3rd place in our global stock database with Novo Nordisk.

Rightmove PLC (London Stock Exchange: RMV.L)
undervalued compared to the average value by 35%

The British company runs the UK`s largest online real estate property portal rightmove.co.uk. Although Britain is no longer part of the EU, it is still European territory. Rightmove provides resale and lettings property advertising services as well as property advertising services to new home developers. The company operates with an impressive return on assets of 186% and has a total score by the Eyestock method of 143%!

Euronav NV (Euronext Brussels: EURN.BR)
undervalued compared to the average value by 36%

Euronav is an integrated owner, operator and manager capable of providing comprehensive shipping services in addition to crude oil transportation across its fleet of over one hundred modern vessels.

At the time of writing, the EURN.BR shares are trading with a price-to-earnings ratio of just over 3, with significant growth potential to the average valuation level, which is also quite conservative 4.

Dino Polska SA (Warsaw Stock Exchange: DNP.WA)
undervalued compared to the average value by 36%

The Polish supermarket network, with annual earnings of more than $350 million and more than 2,000 stores, has a very high return on equity level for the industry of 32% and an untypically low debt burden. This allows Dino Polska to achieve an Eyestock rating of 101%, almost equal to the benchmark company to invest in. The DNP.WA share price recently reached its minimum P/E ratio and confidently bounced up from it. Now direction to 527 PLN?

Are you ready for TOP-1 undervalued viable investment from Europe?

La Francaise des Jeux SA (Euronext Paris: FDJ.PA)
undervalued compared to the average value by 50%

It is ironic that when discussing smart investments, the first place goes to a company that engages in gambling operations in France. The firm operates under the commercial brand name FDJ and provides scratch games, sports betting and draw games via a network of 35,800 points of sale. The size of the business is impressive: revenue in 2023 exceeded 2.5 billion euros. Let us emphasize once again that we are not supporters of gambling, but when such equity presents an opportunity for investors, why not take it into account? Have a look at how net profit has grown in 3 years — from 145 to 244 million, or by 67%!

What happened to stock exchange quotes? FDJ’s share price fell by 26% during the same time!

This divergence opens up the opportunity to buy the stocks of a growing business with an overall rating of 104% at almost minimum estimates with a growth potential of about 50%. It’s up to you to decide whether to take advantage of this opportunity.

Invest Wisely, Accelerate Growth