While Europe is in the middle of a heat wave, millions of investors have gone to the beaches. This always sucks liquidity out of the market, creating more volatility. France’s CAC 40 index is currently probing the value levels we saw over a year ago, as Europe was still plagued by periodic COVID lockdowns. This begins to create possible entry points for valuable players.
We crunched the numbers and came up with compelling value propositions. Our thanks also to Deshe Analytics to access their excellent AI-powered data covering global equities. All stocks listed here are considered a solid buy and have a value rating of 89% or higher from Deshe Analytics.
Nextedia provides digital marketing services in France. It offers cybersecurity, cloud and digital workspace, and customer experience solutions. The company was previously known as Social Mix Media Group and changed its name to Nextedia in July 2013. Its PE ratio is still a bit high at 20x, but it compares well in terms of cash and balance sheet against its competitors in France. IT sector. It even beats the likes of SQLI on cash flow. The company confirmed last month that it was buying cybersecurity specialist Manika and is clearly in growth mode. One to watch.
Carrefour is well known to international investors, being a French multinational group and a dominant player in global supermarkets. But it looks cheap right now and this summer might be the time to take some action. As a large French stock, Carrefour followed the CAC downward at 1H this year. The metrics favor a buy below EUR 17 where it was trading at time of writing (PE ratio down to 12.2x at time of writing). The growth, value and income factors indicate a well-executed and balanced strategy that generates exciting growth. This relative strength should enable Carrefour to continue to perform well even in a difficult market.
LDLC Group (ALLDL)
This is another undervalued French IT stock. The LDLC Group operates as an online reseller of computer and high-tech equipment. It operates 15 retail brands and seven e-commerce websites, as well as a chain of branded stores and franchises. Sales and net income were down in their last report, which could explain some of the loss of investor enthusiasm. The company announced a share buyback in March 2022. Shares have stalled this year, after plunging around $66 a year ago. It’s starting to look like an acquisition target for another tech company at this price, as many financials still look strong.
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Baikowski, together with its subsidiaries, designs, develops, produces and sells ultra-pure alumina powders and formulations. The company also produces mineral oxides and composites, such as zirconia and spinel, as well as YAG, ZTA and cerium oxide for technical ceramics, precision polishing, crystals, additives and coatings. . It is an old fashioned industrial chemicals and materials game, founded in France in 1904. For the full year, the company had a turnover of 44.85 million euros against 35.57 million euros a year ago. The net result amounts to 6.78 million euros against 1.28 million euros a year ago. Basic earnings per share from continuing operations amounted to EUR 1.85 compared to EUR 0.35, which is not negligible. The June selloff has created the current value opportunity, with stocks still trading higher than they were in mid-April, and you see strong momentum over the 24-month period.
Our final French stock prospect is Cast, another tech stock with a market capitalization just over €160m. Cast recently announced the expansion of its ecosystem to help organizations migrate complex, bespoke software to the cloud. These business-critical applications are primarily designed for very different environments and need to be modernized when moving to the cloud. The new company, CAST Highlight, can analyze hundreds of applications in a week to identify what needs to change in the source code, the effort required, the best-suited native cloud services to use, and the best migration path to follow. . Cast shares are up over $7 now and investors who held shares in March would have doubled their money by now. Notice that the PE ratio IS high, but the other metrics still support it as a value bid.