Wednesday, 28. June 2017  
07.02.2017 21:17
Author: Nic Wright

STOCK SCREEN: European Value Stocks For A Reflationary Environment

 

The environment in the Eurozone has become reflationary with news flow on output growth and inflation improving, supporting strong business and consumer confidence. This reflationary environment has led to a style rotation from growth to value, with value outperforming growth by more than 11% since July 2016.

 

It is also worth to highlight, that the European Q4 earnings season has delivered solid results so far. With 29% of companies having reported, the Stoxx 600 Q4 EPS are up 8.3% from Q4 2015 levels. This is substantially above like-for-like consensus expectations of minus 10.0% at this stage of the reporting season. Similarly in the U.S. with over half of S&P 500 companies having reported, consensus estimates for operating EPS are calling for year/year growth of 31% in 4Q16. If those numbers hold, EPS will rise 8.2% in 2016, which is the best yearly gain since 2013.

 

In this context, we screen for European value stocks that seem most attractive according to our AVM’s Intrinsic Stock Value estimates.

 

Here are the filter criteria:

1. Market capitalization above 1bn.

2. At least 25 percent Upside according to both our AVM’s Mean Multiple and Graham fair value approach.

 

Here is our list of stocks matching all criteria in alphabetical order. Company names in the table below are linked to the ANALYZER, our single stock analysis tool. Intrinsic Value Model assumptions can be adapted in the MODELER, our modeling and forecasting environment:

 

CLICK COMPANY NAME FOR DETAILED STOCK VALUE ANALYSIS

COUNTRY

INDUSTRY

LAST PRICE

MARKET CAP.

MEAN MULTIPLE UPSIDE [%]

GRAHAM UPSIDE [%]

GREENBLATT UPSIDE [%]

PRICE / BOOK

 ACS ACTIVIDADES CONS Y SERV

 Spain

 Construction

29.73

9358

156.2

74.4

-14.5

2.5

 BAYERISCHE MOTOREN WERKE AG

 Germany

 Car Manufacturers

82.93

53605

200.0

85.3

159.8

1.2

 CASINO GUICHARD PERRACHON

 France

 Food

49.99

5549

94.3

148.7

94.3

0.8

 CHRISTIAN DIOR SE

 France

 Apparel

193.65

34937

66.9

124.3

114.8

2.9

 CREST NICHOLSON HOLDINGS

 United Kingdom

 Home Builder

533.00

1356

25.2

41.0

108.4

1.7

 DAIMLER AG-REGISTERED SHARES

 Germany

 Car Manufacturers

66.55

71230

86.1

80.5

120.9

1.1

 DRAX GROUP PLC

 United Kingdom

 Electric Utility

366.50

1492

60.7

153.4

-100.0

0.9

 FIAT CHRYSLER AUTOMOBILES NV

 Netherlands

 Car Manufacturers

9.68

14725

125.7

111.8

x

0.8

 METRO AG-VORZ

 Germany

 Food

28.32

9799

33.7

65.2

54.9

1.6

 NEOPOST SA

 France

 Office & Business Equip

29.37

1015

55.5

83.5

36.7

1.0

 PETROFAC LTD

 United Kingdom

 Oil & Gas Services

898.50

3888

74.6

61.4

-36.4

3.0

 STAGECOACH GROUP PLC

 United Kingdom

 Transportation

216.30

1241

71.1

57.5

-2.7

6.3

 TECNICAS REUNIDAS SA

 Spain

 Construction

36.75

2054

28.0

41.3

17.6

4.3

 VIENNA INSURANCE GROUP AG

 Austria

 Insurance

22.68

2903

33.6

37.5

10.6

0.6

 VOLKSWAGEN AG-PREF

 Germany

 Car Manufacturers

141.50

72114

113.2

69.5

39.3

0.8