Absolent Air Care Group and 2 other stocks on the Swedish stock exchange may be undervalued

The Swedish stock market has recently experienced volatility, influenced by broader economic concerns and global market trends. Amid this turbulence, certain stocks can offer undervalued opportunities for discerning investors. Identifying potentially undervalued stocks often involves looking at companies with strong fundamentals that are temporarily out of favor or overlooked by the market. In the current climate, where economic data has created uncertainty, such opportunities can be particularly attractive to those seeking value investing.

Top 10 Undervalued Stocks by Cash Flow in Sweden

Click here to see the full list of 47 stocks from our ‘Undervalued Swedish Stocks Based on Cash Flows’ screener.

Let’s take a closer look at some of our picks from the companies we researched.

Overview: Absolent Air Care Group AB (publ) designs, develops, sells, installs and services air filter units and has a market capitalization of SEK 3.74 billion.

Activities: Absolent Air Care Group generates its revenues mainly from the industrial segment (SEK 1.14 billion) and the commercial kitchen segment (SEK 281.66 million).

Estimated discount to fair value: 36.7%

Absolent Air Care Group appears undervalued, trading at SEK 330, significantly below its estimated fair value of SEK 520.93. Despite recent management changes and a slight decline in quarterly profit from SEK 45.66 million to SEK 40.35 million, the company’s revenue is forecast to grow faster than the Swedish market at 10% per year. In addition, earnings are expected to grow 18.8% per year with a high projected return on equity of 20.4%.

The story continues

Overview: Catella AB (publ) is a real estate investment company with a market capitalization of SEK 2.69 billion.

Activities: Catella AB (publ) generates revenues through three main segments: Corporate Finance (SEK433 million), Investment Management (SEK1.13 billion) and Principal Investments (SEK723 million).

Estimated discount to fair value: 14.5%

Catella AB, trading at SEK 30.5, is undervalued compared to the fair value estimate of SEK 35.65. Despite a recent dividend cut to SEK 0.90 per share, the company reported improved earnings for Q1 2024 with net income of SEK 26 million versus a net loss last year. Forecasts point to significant annual earnings growth of almost 50%, although profit margins have declined and debt coverage by operating cash flow remains weak.

Overview: Xvivo Perfusion AB (publ) is a medical technology company that develops and markets machines and perfusion solutions for the assessment and maintenance of organs awaiting transplantation. The market capitalization is SEK 15.53 billion.

Activities: The company’s revenue segments are Services (SEK83.39 million), Thorax (SEK451.49 million) and Abdominal (SEK163.85 million).

Estimated discount to fair value: 40%

Xvivo Perfusion AB, trading at SEK 493, is significantly undervalued compared to the fair value estimate of SEK 822.03. The company reported strong earnings for Q2 2024 with net profit increasing to SEK 27.19 million from SEK 6.89 million a year ago and revenue increasing to SEK 210.35 million from SEK 154.57 million last year. Despite previous shareholder dilution, forecasts call for robust annual revenue growth of 26.7% and earnings growth of almost 37%.

Where to now?

Are you ready to try other investing styles?

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. Our articles are not intended as financial advice. They do not constitute a recommendation to buy or sell any stock and do not take into account your objectives or financial situation. We aim to provide you with long-term focused analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in the stocks mentioned.

The companies discussed in this article include OM:ABSO OM:CAT B and OM:XVIVO.

Do you have feedback on this article? Are you concerned about the content? Please contact us directly. You can also send an email to [email protected]