Significantly Undervalued: German Stocks
Volkswagen: A Money Machine, Yet Cheap as Chips
Looks like Volkswagen is raking in the dough, bagging over €10 billion in profits just six months in. In fact, analysts predict the yearly profit to nudge past the €17 billion mark.
So, what gives with its paltry market capitalization? A mere €90 billion for the DAX-listed common stocks and preferred shares combined, resulting in a laughable price-to-earnings (P/E) ratio of just over five. In essence, an investor could Arkansaw-and-done finance the whole shebang within six years using VW's profit, provided the profit level stays put.
Now, K + S might just give Volkswagen a run for its money. With a market cap less than four times its anticipated profit for the upcoming twelve months … mind = blown.
If you thought that was impressive, the market crash this year hashed the value of stocks down to pocket change prices not seen in yonks. According to Bloomberg, the American S&P 500 index P/E ratio dipped from nearly 22 to a smidge over 15 this year. Goldman Sachs strategists recommend it's a "crash" in stock valuations. And Germany? It's much the same story. The DAX's P/E ratio briefly cradled 17, nosedived to a measly ten this year, standing at eleven currently (see chart). Among the 100 HDAX stocks, a whopping 28 were boasting single-digit P/E ratios recently.
Wanna know which DAX stocks are hiding the best deals? Find out in the latest issue of €uro am Sonntag.
This week's issue features:
- Magenta's Conquest T-Mobile US is rockin' the U.S. with flashy campaigns, benefiting its German home turf (p.20)
- Bravery Rewarded Political strife and a flagging economy are dampening stock prices, but experts see goldmines in Chinese stocks right now (p.22)
- Bargain Hunters Galore After Kion, the logistics industry offers long-term opportunities despite stock consolidation (p.24)
- The Great Switcheroo In the long run, Ether might snatch Bitcoin's crown. Also, thanks to the new update (p.30)
- Tale of Two Markets Odd correlations between stocks and bonds confound mixed portfolios. How pros handle this intricate dance (p.32)
Grab a sneaky peek at €uro am Sonntag now, on the cheap. You'll get all the scoop on politics, business, and the stock market, delivered straight to your device each weekend. Sign up for the €uro am Sonntag trial subscription and enjoy 12 digital issues for a snip-deal €36.00, instead of €53.88.
Psst! Still on the fence? Here's a sneak peek at the issue:
- Algorithms, not Ads, Rule the Market: AI is taking the reins, raising the question: are humans still needed in trading? (p.8)
- The Rise of Actually Affordable Housing: Governments worldwide are finally tackling housing inequality. Find out how (p.15)
- Investing 101 for the Tech-Savvy: Are you ready to dabble in the digital world? Learn how to navigate the nuances of cutting-edge investments (p.26)
- Green Investments: The Future of Finance? As the world takes action against global warming, consider these sustainable investment opportunities (p.34)
- The Most Misunderstood Asset Class: Cryptocurrencies: Debunking popular myths and separating facts from fads (p.38)
Investing in Volkswagen, with a profit level projected to surpass €17 billion this year, seems like a smart move given its low price-to-earnings ratio of just over five. Furthermore, the logistics industry, amid stock consolidation, offers long-term opportunities for those searching for bargain deals, much like Kion did recently.
