Exploring 3 Undiscovered Gems in Germany for Your Investment Portfolio #NewsGerman

In a week marked by volatility and mixed economic signals, Germany’s DAX index managed to eke out a modest gain of 0.35%, reflecting some resilience amid broader market swings. With the eurozone showing signs of industrial strength despite consumer struggles, now may be an opportune moment to explore lesser-known opportunities in the German market. A good stock often combines strong fundamentals with growth potential, especially relevant in today’s unpredictable environment. Here are three undiscovered gems in Germany that could add value to your investment portfolio.

Top 10 Undiscovered Gems With Strong Fundamentals In Germany

Click here to see the full list of 44 stocks from our German Undiscovered Gems With Strong Fundamentals screener.

Let’s review some notable picks from our screened stocks.

Simply Wall St Value Rating: ★★★★★★

Overview: Eckert & Ziegler SE manufactures and sells isotope technology components worldwide, with a market cap of €885.10 million.

Operations: Eckert & Ziegler SE generates revenue primarily from the sale of isotope technology components. The company’s financial performance is marked by a net profit margin of 12.50%.

Earnings for Eckert & Ziegler surged by 38.8% over the past year, outpacing the Medical Equipment industry’s -6.4%. The P/E ratio stands at 22.9x, below the industry average of 25.5x, indicating good value. Recent reports show Q2 sales at €77.76M and net income at €9.54M, compared to last year’s €60.03M and €6.17M respectively; basic EPS rose to €0.46 from €0.3 a year ago, highlighting strong performance in H1 2024 with net income hitting €18M compared to last year’s €10.91M.

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Simply Wall St Value Rating: ★★★★★★

Overview: MBB SE, with a market cap of €594.50 million, focuses on acquiring and managing medium-sized companies in the technology and engineering sectors both in Germany and internationally.

Operations: MBB SE generates revenue from three primary segments: Consumer Goods (€94.23 million), Technical Applications (€378.50 million), and Service & Infrastructure (€487.10 million).

MBB, a small cap German company, has shown impressive earnings growth of 63.9% over the past year, outpacing the Industrials industry’s -2.3%. Trading at 23.1% below its estimated fair value, it also boasts a debt to equity ratio that improved from 12.6% to 6.9% in five years. The firm is actively seeking acquisitions with a strong pipeline and expects bolt-on deals soon, potentially boosting future growth by an anticipated 33.57% annually.

Simply Wall St Value Rating: ★★★★★★

Overview: Mensch und Maschine Software SE offers CAD/CAM/CAE solutions, product data management, and building information modeling/management services in Germany and internationally, with a market cap of approximately €1.01 billion.

Operations: Mensch und Maschine Software SE generates revenue primarily from two segments: M+M Software (€107.71 million) and M+M Digitization (€216.19 million).

Mensch und Maschine Software (MuM) has shown solid performance in recent periods. The company reported Q2 sales of €75.1 million, up from €71.32 million last year, with net income rising to €7.34 million from €6.58 million. Over the past year, earnings grew by 7.6%, outpacing the software industry’s -4.4%. Additionally, MuM’s debt-to-equity ratio improved significantly over five years, dropping from 42.8% to 15.5%. The firm is trading at a notable discount of 36% below its estimated fair value and maintains high-quality earnings with robust EBIT coverage for interest payments (247x).

Where To Now?

• Reveal the 44 hidden gems among our German Undiscovered Gems With Strong Fundamentals screener with a single click here.

• Got skin in the game with these stocks? Elevate how you manage them by using Simply Wall St’s portfolio, where intuitive tools await to help optimize your investment outcomes.

• Invest smarter with the free Simply Wall St app providing detailed insights into every stock market around the globe.

Ready For A Different Approach?

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 XTRA:EUZ XTRA:MBB and XTRA:MUM.

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