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June 2024 Insights into stocks that are undervalued on the SIX Swiss Exchange

Amid a cautious atmosphere in the Swiss market, with investors wary of the prospect of major policy announcements, the Swiss National Bank’s expected rate cut could have significant economic consequences. In such a context, identifying undervalued stocks on the SIX Swiss Exchange offers potential opportunities for investors looking for value in a market characterized by subdued but hopeful moves.

Top 10 undervalued stocks based on cash flows in Switzerland

Name

Current price

Fair value (estimated)

Discount (estimated)

COLTENE Holding (SWX:CLTN)

CHF 49.60

76.20 CHF

34.9%

Burckhardt Compression Holding (SWX:BCHN)

CHF 590.00

822.87 CHF

28.3%

Julius Bär Gruppe (SWX:BAER)

50.88 CHF

96.07 CHF

47%

Sonova Holding (SWX: COMING SOON)

269.60 CHF

448.50 CHF

39.9%

Temenos (SWX:TEMN)

CHF 61.40

83.21 CHF

26.2%

SGS (SWX:SGSN)

81.34 CHF

122.76 CHF

33.7%

Comet Holding (SWX:COTN)

CHF 371.00

545.58 CHF

32%

Medartis Holding (SWX:MED)

CHF 68.00

120.52 CHF

43.6%

Kudelski (SWX: KUD)

CHF 1.43

CHF 1.84

22.2%

Galderma Group (SWX:GALD)

76.06 CHF

147.99 CHF

48.6%

Click here to see the full list of 13 stocks from our undervalued SIX Swiss Exchange Stocks Based On Cash Flows screener.

Let’s take a closer look at some of our picks from the companies screened

Overview: Burckhardt Compression Holding AG is a global manufacturer and marketer of reciprocating compressors, with a market capitalization of approximately CHF 1.998 billion.

Activities: The company generates revenue through two primary segments: the Systems Division, which generated CHF 642.81 million, and the Services Division, with revenues of CHF 339.15 million.

Estimated discount to fair value: 28.3%

Burckhardt Compression Holding AG reflects a solid financial year with a turnover of CHF 981.96 million and a net profit of CHF 89.99 million and trades more than 20% below its estimated fair value, set at CHF 590 compared to a fair value of CHF 822.87 . Despite dividends not being well covered by cash flows, the company’s earnings and revenue growth are expected to exceed the Swiss market average, with a very high return on equity expected over three years.

SWX:BCHN discounted cash flow as of June 2024SWX:BCHN discounted cash flow as of June 2024

SWX:BCHN discounted cash flow as of June 2024

Overview: SGS SA, headquartered in Geneva, Switzerland, specializes in providing inspection, testing and verification services in various regions, including Europe, Africa, the Middle East, the Americas and Asia Pacific, with a market capitalization of CHF 15.40 billion.

Activities: The company’s revenue is divided into several segments: Business Assurance (CHF 746 million), Natural Resources (CHF 1.58 billion), Health & Nutrition (CHF 857 million), Connectivity & Products (CHF 1.25 billion) and Industries & Environment (CHF 2.19 billion). billion).

Estimated discount to fair value: 33.7%

Priced at CHF 81.34, SGS is considered undervalued with a current market estimate of CHF 122.76 based on discounted cash flows, indicating significant potential despite trading 33.7% below fair value. Although the 3.93% dividend yield is poorly supported by earnings figures, SGS forecasts robust earnings growth of 9.8% year-on-year, surpassing the Swiss market average of 8.2%. However, concerns include high debt levels and shareholder dilution over the past year, in addition to a revenue growth forecast (4.7% per year) that will not reach exceptionally high levels, but still exceeds market growth ( 4.4%).

SWX:SGSN discounted cash flow as of June 2024SWX:SGSN discounted cash flow as of June 2024

SWX:SGSN discounted cash flow as of June 2024

Overview: Swissquote Group Holding Ltd operates globally and offers a range of online financial services to private, affluent and professional institutional clients with a market capitalization of CHF 4.27 billion.

Activities: The company generates revenue mainly through leveraged Forex and securities trading, contributing CHF 101.09 million and CHF 429.78 million respectively.

Estimated discount to fair value: 20.6%

Swissquote Group Holding, valued at CHF 287.6, is considered undervalued by 20.6%, with the price below its estimated fair value of CHF 362.39 based on discounted cash flows. The company’s revenue and profit growth forecasts of 10.3% and 14% respectively exceed Swiss market averages, indicating potential despite not reaching exceptionally high levels. Furthermore, a forecast return on equity of 23.1% over three years underlines strong profitability prospects versus benchmarks.

SWX:SQN discounted cash flow as of June 2024SWX:SQN discounted cash flow as of June 2024

SWX:SQN discounted cash flow as of June 2024

Where to go now?

Would you like to explore some alternatives?

This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. We aim to provide you with targeted, long-term analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Simply Wall St has no positions in the stocks mentioned.

Companies discussed in this article include SWX:BCHN, SWX:SGSN, and SWX:SQN.

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