Discovering Germany's Undiscovered Gems This August 2024

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As the European market shows signs of optimism with Germany's DAX index rising 1.70% amid hopes for interest rate cuts, investors are increasingly looking toward small-cap stocks that may benefit from this favorable economic climate. In this environment, identifying strong growth potential and solid fundamentals becomes crucial for uncovering hidden gems in Germany’s stock market.

Top 10 Undiscovered Gems With Strong Fundamentals In Germany

Name

Debt To Equity

Revenue Growth

Earnings Growth

Health Rating

EnviTec Biogas

37.96%

19.34%

51.22%

★★★★★★

FRoSTA

8.18%

4.36%

16.00%

★★★★★★

Mühlbauer Holding

NA

10.49%

-12.73%

★★★★★★

Paul Hartmann

26.29%

1.12%

-17.65%

★★★★★☆

Südwestdeutsche Salzwerke

0.30%

4.57%

25.01%

★★★★★☆

HOMAG Group

NA

-31.14%

23.43%

★★★★★☆

Baader Bank

91.28%

12.42%

-8.00%

★★★★★☆

BAVARIA Industries Group

3.19%

0.18%

28.18%

★★★★★☆

Wilson

64.79%

30.09%

68.29%

★★★★☆☆

BAUER

78.29%

2.30%

-38.28%

★★★★☆☆

Click here to see the full list of 46 stocks from our German Undiscovered Gems With Strong Fundamentals screener.

Here we highlight a subset of our preferred stocks from the screener.

Energiekontor

Simply Wall St Value Rating: ★★★★★☆

Overview: Energiekontor AG is a project developer involved in the planning, construction, and operation of wind and solar parks in Germany, Portugal, and the United States with a market cap of €800.56 million.

Operations: Energiekontor's primary revenue streams include €171.48 million from Project Development and Sales (Onshore Wind, Solar) and €78.30 million from Power Generation in Group-Owned Wind and Solar Parks. The company also generates €7.72 million from Business Development, Innovation, and Others segments while incurring a reconciliation cost of -€2.85 million.

Energiekontor, a promising small-cap player in Germany's renewable energy sector, has shown robust earnings growth of 30.2% over the past year, outpacing the electrical industry average of 2.6%. Despite its high net debt to equity ratio of 144.5%, the company's interest payments are well covered by EBIT at six times coverage. Trading at a price-to-earnings ratio of 10.8x below the German market average (16.6x), Energiekontor offers good relative value and is forecasted to grow earnings by 10.69% annually.

XTRA:EKT Earnings and Revenue Growth as at Aug 2024
XTRA:EKT Earnings and Revenue Growth as at Aug 2024

Eckert & Ziegler

Simply Wall St Value Rating: ★★★★★★

Overview: Eckert & Ziegler SE manufactures and sells isotope technology components worldwide and has a market cap of €935.13 million.