Three Undiscovered Gems In Germany To Consider For Your Portfolio

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Germany's DAX Index has seen a significant surge, reflecting optimism driven by China's new stimulus measures and hopes for interest rate cuts in the eurozone. Despite mixed economic indicators, the German market remains a fertile ground for discovering promising small-cap stocks. In this environment, identifying stocks with strong fundamentals and growth potential can be particularly rewarding. Here are three undiscovered gems in Germany that could add value to your portfolio.

Top 10 Undiscovered Gems With Strong Fundamentals In Germany

Name

Debt To Equity

Revenue Growth

Earnings Growth

Health Rating

Mineralbrunnen überkingen-Teinach GmbH KGaA

19.91%

0.96%

-5.02%

★★★★★★

Westag

NA

-1.56%

-21.68%

★★★★★★

FRoSTA

8.18%

4.36%

16.00%

★★★★★★

EnviTec Biogas

37.96%

19.34%

51.22%

★★★★★★

Mühlbauer Holding

NA

10.49%

-12.73%

★★★★★★

Paul Hartmann

26.29%

1.12%

-17.65%

★★★★★☆

HOMAG Group

NA

-31.14%

23.43%

★★★★★☆

Baader Bank

91.28%

12.42%

-8.00%

★★★★★☆

DFV Deutsche Familienversicherung

NA

19.63%

62.92%

★★★★★☆

Wilson

64.79%

30.09%

68.29%

★★★★☆☆

Click here to see the full list of 56 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 €787.87 million.

Operations: Energiekontor AG generates revenue primarily from Project Development and Sales (€171.48 million) and Power Generation in Group-Owned Wind and Solar Parks (€78.30 million). The company also engages in Business Development, Innovation, and other activities contributing €7.72 million to its revenue.

Energiekontor's earnings grew by 30.2% last year, outpacing the Electrical industry’s 0.7%. Its P/E ratio of 10.6x is attractive compared to the German market's 16.7x. Despite a high net debt to equity ratio of 144.5%, interest payments are well covered by EBIT at 6x coverage, and debt has decreased from 373.6% to 234.6% over five years. Recent earnings showed EUR 78 million in sales and EUR 11 million in net income for H1-2024, though revenue fell from EUR114 million last year.

XTRA:EKT Debt to Equity as at Sep 2024
XTRA:EKT Debt to Equity as at Sep 2024

Eckert & Ziegler

Simply Wall St Value Rating: ★★★★★★

Overview: Eckert & Ziegler SE manufactures and sells isotope technology components worldwide, with a market cap of €933.04 million.