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BDSwiss | March 23, 2017

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5 treasures on the DAX - BDSwiss

5 treasures on the DAX
bdswiss

There are still treasures to be found on the DAX. 5 of the 30 companies on Germany’s most important stock exchange are currently undervalued, and it’s worth taking a closer look.

Cheap during a crisis

Of course, the cheapest companies can be found in industires that are in crisis. However, here it is important to remember that despite the price rally following the last financial crisis, pre-crisis price levels have not yet been reached. Share prices on the German index have been in this situation for quite some time. This situation is reflected in the share prices of our 5 “treasures”.

DAX-Banks5-bdswiss-small

The banks on the DAX are currently by far the cheapest shares that you can buy on the Frankfurt-based exchange. With a price to book ratio of just 0.29, the Commerzbank is a real bargin. After its crises of the past few years, Deutsche Bank has also lost significantly more equity than actual assets. Currently Deutsche bank has a price to book ratio of around 31%.

Volkswagen

Of course, the scandalous Volkswagen group is not missing from our “treasures” list. After the share price crashed last year, the Wolfsburg-based company’s share are only valued at a bout 66 percent of what the balance sheet says they should be. Volkswagen has responded to this situation and will be resturcturing the group. Over 15,000 jobs will be eliminated. The company will be streamlined and will shift its focus to mobility.

German insurance companies

Low interest rates and rising expenses due to environmental catastrophies have recently led to the share prices of Allianz and Münchener Rück plummeting. The long-term outlook doesn’t look good either. In addition to increased claims and expensive old contracts, there are currently no good investment opportunities for the insurers, especially since thier plan to privatize the German motorways failed. The low interest rate policy currently is endangering the traditional business model of insurers.

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