The Swiss market recently experienced a modest uptick, with the SMI index closing slightly higher as investors anticipate further interest rate cuts following the European Central Bank’s recent actions. In this environment of cautious optimism, identifying undervalued stocks on the SIX Swiss Exchange can be a strategic move for investors looking to capitalize on potential discrepancies between current stock prices and their intrinsic values.
Top 10 Undervalued Stocks Based On Cash Flows In Switzerland
Name |
Current Price |
Fair Value (Est) |
Discount (Est) |
Swissquote Group Holding (SWX:SQN) |
CHF305.40 |
CHF558.57 |
45.3% |
Georg Fischer (SWX:GF) |
CHF56.50 |
CHF108.54 |
47.9% |
lastminute.com (SWX:LMN) |
CHF18.04 |
CHF29.33 |
38.5% |
Julius Bär Gruppe (SWX:BAER) |
CHF55.26 |
CHF103.64 |
46.7% |
Komax Holding (SWX:KOMN) |
CHF117.60 |
CHF202.90 |
42% |
Clariant (SWX:CLN) |
CHF12.48 |
CHF21.44 |
41.8% |
Comet Holding (SWX:COTN) |
CHF293.00 |
CHF525.45 |
44.2% |
SGS (SWX:SGSN) |
CHF96.74 |
CHF150.98 |
35.9% |
Montana Aerospace (SWX:AERO) |
CHF16.42 |
CHF27.84 |
41% |
Sensirion Holding (SWX:SENS) |
CHF66.60 |
CHF117.44 |
43.3% |
Let’s take a closer look at a couple of our picks from the screened companies.
Overview: Barry Callebaut AG, along with its subsidiaries, is involved in the manufacture and sale of chocolate and cocoa products, with a market cap of CHF8.65 billion.
Operations: The company’s revenue segments include Global Cocoa, which generated CHF5.31 billion, and Segment Adjustment, contributing CHF6.76 billion.
Estimated Discount To Fair Value: 30.9%
Barry Callebaut appears undervalued, trading 30.9% below its estimated fair value of CHF2.29 billion, with a current price of CHF1.58 billion. Despite low forecasted return on equity at 15%, the company shows strong earnings growth potential at 25.93% annually, outpacing the Swiss market’s 11.6%. However, debt coverage by operating cash flow is weak, which could pose financial challenges despite high-quality earnings and revenue growth projections exceeding market averages.
Overview: Clariant AG is a global company involved in the development, manufacture, distribution, and sale of specialty chemicals, with a market cap of CHF4.10 billion.
Operations: The company’s revenue is derived from three main segments: Care Chemicals (CHF2.22 billion), Adsorbents & Additives (CHF1.02 billion), and Catalysis (CHF927 million).
Estimated Discount To Fair Value: 41.8%
Clariant is trading at CHF12.48, significantly below its estimated fair value of CHF21.44, suggesting it is undervalued based on discounted cash flow analysis. Despite a high debt level and unsustainable dividend coverage, the company shows strong earnings growth prospects at 30.1% annually, surpassing the Swiss market’s 11.6%. However, recent earnings reports indicate a decline in sales and net income compared to last year, which may impact short-term financial performance.
Overview: Sensirion Holding AG develops, produces, sells, and services sensor systems, modules, and components globally with a market cap of CHF1.04 billion.
Operations: The company’s revenue is derived entirely from its sensor systems, modules, and components segment, amounting to CHF237.91 million.
Estimated Discount To Fair Value: 43.3%
Sensirion Holding, trading at CHF66.6, is significantly below its estimated fair value of CHF117.44 based on discounted cash flow analysis. Despite recent earnings revealing a net loss of CHF36.01 million for the first half of 2024, the company is expected to achieve profitability within three years with revenue growth forecasted at 13.9% annually, outpacing the broader Swiss market’s growth rate. Analysts agree on a potential stock price increase of 22.9%.
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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:BARN SWX:CLN and SWX:SENS.
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