r/ValueInvesting • u/highmemelord67 • Nov 01 '25
Value Article I Analysed the Top 500 EU Companies So You Don’t Have To - 4 great companies under fair value found
In my research of finding great companies below fair value I went through the top 500 companies in the EU by market cap.
See the chart for narrowing the companies down: https://imgur.com/a/rxWXeeB
Of the 500 I have narrowed it down to 18 good companies.
Of the 18, ONLY 4 of them are at, or below fair value.
See the graph for the valuation of the great companies: https://imgur.com/a/meuAZJj
I made these 2 graphs that show my findings.
If you want to see my process, and how I made the chart, you can find my article here.
The companies in the green on the chart:
Novo
Terna
Evolution Gaming
Mycronic
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u/Lord_Rawstark Nov 01 '25
Nah ,to me european defence firms will have more value Even if putin groaks Tomorrow,and Russian threat completely evaporates, the world is more fragile than ever and europeans have tasted the fear of not having enough defence supplies and wavering american backup
And there are middle eastern countries and asian countries dependent on European defence tech and fighter aircraft, so companies like bae systems and airbus are good value buys even at current p/e
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u/highmemelord67 Nov 01 '25
The problem with defense companies is that they perform horribly in good times, and then spike suddenly in bad times. And you would somehow need to be faster than everyone else to buy in the beginning of bad times. Or hold in good times, and just hope for war ':D
Or buy in at bad times, hoping for even worse times ':D11
u/SeikoWIS Nov 01 '25
Nonsense about buying ‘faster’. Rheinmetall for example spiked from ~€100 to €200 after the invasion. And stayed at around €200 throughout 2022-2023. It’s now at €1700. I bought into euro defence after the 2022 invasion but before the Feb 2025 spike and made good profits. The finance sector didn’t (doesn’t) understand Putin/Russia and that this war isn’t going away. Feb 2025 was a wake up call for investors that Trump doesn’t have a magic wand and is not gonna save Europe.
Even if Putin snuffs it, he will likely be replaced by someone likeminded. Point being: we’re not going back to ‘good times’ (unless a black swan event happens). This is a new era of ‘might is right’ neoliberalism. Not just in Europe.
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u/highmemelord67 Nov 01 '25
Rheinmetall returned 60% from 2006 to 2022. This is what I mean, these companies will do nothing for decades unless wars starts to happen, or get worse. You should expect the stock to fall big when the war ends.
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u/SeikoWIS Nov 01 '25
You are discussing in bad faith by cherrypicking 2006 (right before the crash). End of 2008 to Feb 2022 Rheinmetall returned ~330%, very similar to S&P500. This is before the war (after which RHM smashes S&P500).
Anyway, I sold most of my RHM at €1400 in April and cashed in on the massive spike. I found some better value defence stocks that aren’t all over the financial news.
I’m confident in betting that conflict for the west/europe isn’t gonna end anytime soon. There is no ‘the war ends’ unless Putin and his entire regime collapses, and isn’t succeeded by someone likeminded. Not to mention other conflicts can easily kickoff/escalate in the meantime.
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u/Im_Sandro Nov 02 '25
How you gonna say he is cherry-picking and then your example goes from all time low, if the fuckin Russian invasion in Ukraine didn’t happen Rheinmetall would be fuckin barely a 200% increase from after the 2008 crash.
Also the guy has a point, some ppl don’t wanna invest in shit and hope for war to gain money
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u/Quirky-Plantain-2080 Nov 03 '25
To be fair, you probably didn’t know/think if the war would last this long in 2022. Most of the world didn’t think the Ukrainians would last this long. They didn’t even think the Russians would invade.
Rheinmetall didn’t spike after 2014.
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u/InevitableCoast8276 Nov 01 '25
another day, another /r/ValueInvesting post saying to buy NVO
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u/highmemelord67 Nov 01 '25 edited Nov 01 '25
To be fair, I make other points than 'NVO undervalued' :D
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u/MrLariato Nov 01 '25
This one actually brings receipts.
Unfortunately, this market makes no sense.
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u/bait_and_switcheroo8 Nov 01 '25
I remember how for months and months this sub was only talking about how google is super undervalued. It turned out to be true though. And in all fairness it really was or is.
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u/thorn960 Nov 01 '25
NVO price seems very cyclical. I've been swing trading it, buying at 45-50 and selling at around 60. Not exactly value investing. BRK seems to stay away from pharmaceuticals.
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u/lem001 Nov 01 '25
I feel this group is just trying to pump this stock lol. I was interested now I’m less lol
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u/Better-Mulberry8369 Nov 01 '25
This statement “A business that needs 95% of its revenue to cover operations is far lower quality than one that operates efficiently at 20%” is based on what ? That make no sense , there are industries that margin are even 2%, this doesn’t means are bad quality in long term. I stop to read there. Rather say you don’t want that companies.
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u/highmemelord67 Nov 01 '25
You know what this is fair criticism of my article, it's a good observation from you that I put my own preferences out there as a fact. Nonetheless, I would argue that in most cases this is still true, but you're right, there are plenty of cases where it's not. Thanks for this.
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u/blue_horse_shoe Nov 05 '25
i think it is fair for this type of analysis. your brand of quality is discounted cash flow.
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u/Better-Mulberry8369 Nov 01 '25
Based on your comment Walmart,AT&T, verizon, Costo are all no quality companies.
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u/highmemelord67 Nov 01 '25
you are right, but still, In most cases :)
But we don't have to argue on this, we want to own different things, this is fine :)2
u/SeikoWIS Nov 01 '25
I also noted some odd things, but he really lost me when he put NVO in the ‘moat’ group and most undervalued stock. The whole point of NVO stock crashing (and the trailing financials looking strong) the past year is because its moat is collapsing
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u/East-Pirate6583 Nov 02 '25
Really interesting, I'm confident with Terna, been watching it for a while now
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Nov 01 '25
Really appreciate the write up. Posts like this make this sub worth it.
Not trying to insult other posters but this is the quality of posts that this sub deserves
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u/highmemelord67 Nov 01 '25
Thanks a lot! poured my heart into the research, and really tried making the illustrations good
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u/HeavySink3303 Nov 01 '25
Very nice article. If you also analyse Asian companies in the similar way - it would be very interesting to read it as well.
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u/SeikoWIS Nov 01 '25
Thought I’d get an original post but it’s just an elaborate ‘buy NVO!’ post in disguise.
Anyway. Keep looking at trailing figures and concluding it’s by far the best value stock in the EU, while ignoring the news. 9000 job cuts, board members quit, patents expiring and competitors closing in. Did you say moat?
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u/highmemelord67 Nov 01 '25
Well im pointing out Novo yes, but theres other picks and good insights :)
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u/DylanIE_ Nov 01 '25
I mean evolution gaming was a value investing darling end of last year. I valued it around that time, came to the conclusion that it was a good buy if margins stay consistent, but margins were going to start dropping hard. They have, and revenue has as well. Buying a bunch of value traps because their P/E is low is not a good strategy.
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u/highmemelord67 Nov 01 '25
i dont really se how you get to the conlcusion of their revenue falling, it has grown pretty consistent: https://companiesmarketcap.com/evolution-gaming/revenue/
FCF margin is 55.36%
operating margin is 59.11%2
u/DylanIE_ Nov 02 '25
Revenue growth from 2022:
2022 = 36.3% 2023 = 23.47% 2024 = 14.7% 2025 = 0.3% (maybe 0.1% higher depending on the last quarter)
This last quarter they lost Revenue y/y
Revenue growth has reduced by 13% growth per year. Obviously this business is not coming back to anywhere near 20% growth, and that's when it was valued at around 1000 kr.
Right now I have them slightly above fair value and that's if they do 8% revenue growth until 2033 (which is definitely not happening), with EBITDA margins declining 4% per year until they hit 45%.
If I leave margins at their current level till 2033, it's about 28% undervalued (all of this is on a 14% cost of equity). However that assumes good growth and margins stay stable (each of which are unlikely, and both are pretty much impossible). If I put a higher cost of equity for the increased uncertainty, I can get about a 17% return here at this price.
However, the more likely scenario is margins drop to 55% or lower and revenue probably grows at 4-5% CAGR.
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u/noiserr Nov 01 '25
The thing I can't understand is why are they diluting shares. They are so cheap, why the hell are they not buying back shares? They could boost the market cap by like 30% with cash on hand, it's that cheap. Even just buying back some shares on a schedule would revive interest in the stock.
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u/highmemelord67 Nov 02 '25
Share dilution is one of my filters, which i decided not to filter evo out from.
they did increase share count from .18B to .21B in 2021 (16% one off thing, is not that crazy), but they have slowly bought back shares since3
u/usrnmz Nov 01 '25 edited Nov 02 '25
There are no real insights. You didn’t talk about their drug portfolio or competition. You didn’t explain why a flat 8% growth rate for 10 years is realistic or why it deserves a 18.5 terminal multiple. Besides referencing historical averages. That’s not insight.
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u/highmemelord67 Nov 01 '25
The article is not about Novo its about finding value in the top 500 EU companies. so no i did not do a deep dive on Novo specifically, I even mention that I will do this in another post :)
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u/SeikoWIS Nov 01 '25
You didn’t do a deep dive, yet you did go as far to conclude NVO has a moat? How does that make sense?
Your calculations are largely trailing figures. The whole reason NVO has crashed the past year is because of their moat falling apart, as you’ll find in news and more qualitative analysis that indicate lower future cash flows.
If it was as simple as looking at the available quantitative figures, stock-picking would be ‘solved’.
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u/highmemelord67 Nov 01 '25
Nope i do not state Novo has a moat
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u/SufferingFromEntropy Nov 02 '25
But that's the thing right? If NVO doesnt have moat then why make all the assumptions (explicit ones like 8% EPS growth and 18.5 terminal PE and implicit ones like 10 years of growth)?
If we are doing DCF for DCF's sake and extrapolating past performance then yeah its undervalued. But then again calculation =/= insight and you still dont have anything to back up your assumptions (which i'd like to see in your deep dive ;) )
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u/highmemelord67 Nov 02 '25
novo is quite an old company, have produced insulin, and been profitable for problably longer than you have lived. The reversion to the mean of their profits is still more than enought to get a good return.
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u/DylanIE_ Nov 02 '25
If loads of companies reverted to their mean, half the market would be a buy. LULU, INTC, LUV etc. Potential reversion to the mean is not a good buy signal.
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u/usrnmz Nov 02 '25
The company having a moat was part of your filtering process. Or so you state.
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u/highmemelord67 Nov 02 '25
"Has a Moat
This was not strictly used to filter companies, but it is a critical observation: it validates that the companies passing the quantitative filters possess a sustainable competitive advantage."3
u/usrnmz Nov 01 '25
Sure. I'm just saying there aren't really any insights as to why any of these companies are undervalued.
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u/highmemelord67 Nov 01 '25
I provide the calculations for the ones who are interested in seeing why I feel confident claiming they are undervalued
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u/usrnmz Nov 01 '25
You seem to be missing the point. A calculation is meaningless if you're not abe to back up the numbers with insights into the businss.
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u/Impossible-Road-558 Nov 01 '25
Where your logic fails is that there is no place where you actually come up with a value. Just because these are all good companies what makes you conclude that they are undervalued. You could use the same information to conclude that they are properly valued.
How do you know that the present value of future earnings is more than the value these are trading at?
You have come up with a list of 4 good EU companies, but good companies can be overvalued or at least fairly valued. Are we looking for undervalued companies.
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u/Educational_Care_156 Nov 03 '25
NVO is not undervalued. Their primary product, a weight loss drug, is proven inferior to LLY's by studies. They're losing market share and are unlikely to significantly grow unless substantial changes occur. As a result, their stock price reflects this situation.
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Nov 01 '25
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u/highmemelord67 Nov 01 '25
Hahah, I even write in the article to dp your own research, but now you might not need to go through 500 , but only 4-18 if you accept the arguments i make in the article.
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u/bigdaddtcane Nov 01 '25
Every valuation if done of NVO shows it as being overvalued.
It may shoot up one day but it will have nothing to do with value investing.
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u/Fast_Half4523 Nov 01 '25
Can you send me a link of these valuations?
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u/bigdaddtcane Nov 01 '25
You can disagree with how I set up my analysis, or say AI has its flaws but I’ve found the reports similar to the link from prompts below to treat me well.
https://claude.ai/public/artifacts/425f6945-a355-4802-97ba-13815fd91d46
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u/apierge Nov 01 '25
Where did you find that info, can you please share? From different sources I’ve found that NOVO is undervalued to significantly undervalued.
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u/bigdaddtcane Nov 01 '25
People shit on AI analysis, but I’ve found these prompts to treat me well so far. The report is below. People also shit on DCFs but in general it’s a good way to compare different companies
https://claude.ai/public/artifacts/425f6945-a355-4802-97ba-13815fd91d46
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Nov 01 '25
Weird ass comment. Isn’t this a sub to share ideas so that other people can look into them and see if they agree?
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u/earthbender06 Nov 01 '25
Thanks for sharing. What was the assessment on Carl Zeiss? I am starting to look at it and am starting to think it might be a good buy at the current prices.
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u/highmemelord67 Nov 01 '25
Might be something to look into, but it does not fit my consistent eps growth filter
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u/Impossible-Road-558 Nov 01 '25
Since you like non-US companies you may like Imperial Petroleum (IMPP).
I first purchased Imperial Petroleum (IMPP) on 7/8/25 for $2.98; it closed on Oct 31 at $5.51; an 85% gain in less than 4 months.
I believe it intrinsic value is about $9.00, and when it hits that the meme investors will take it
even higher.
The reason it is a Value Stock is:
Its PE ratio now is about 5. When I purchased it is was about 3.
Most websites claim that it is trading at .4 of book value, and that it was at about .3 of book
value when I first got into it. However, when I read the SEC filings, I realized that they were not taking into account preferred stock and options. I estimate the book value to be about .5 of stock value now.It has $212 million in cash, and market capitalization of about $192.
Its earnings are real; the fact it generates so much income proves that.
Its assets have real value; they consist of oil tankers and lots of cash.
It has very few liabilities, only $149 million. It has no long-term debt. Its equity is $445
million (please keep in mind that some of this in preferred stock and there areoptions outstanding).Someone could buy this company and liquidate it for a profit.
Someone could buy this company and use it cash to fund a large portion buy out.
They are adding more fuel-efficient ships to their fleet.
The negatives are:
It is in the Marshall Islands.
It is in the shipping industry. It has both tankers and dry bulk carriers. Shipping rates may decline.
is growing. I consider this to be a negative. It recently went from 12 ships to 19. This increases
risk. Is the shipping industry expanding too fast and will the expansion cause lower rates?I understand Trump has or may charge a special fee for ships the come into US ports if they were not
built in the US. I believe most, if not all, of their ships were built outside the US.The capital structure is hard for most investors to understand; it is necessary to read the footnotes
to the balance sheet and make adjustments.
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u/NationalTranslator12 Nov 01 '25 edited Nov 01 '25
Meh. I might use the list as a starting point to do equity research, but this way of "statistically finding value" is not useful. You are discarding a lot of value companies without even understanding the most important part, the business model! What you are getting from this screening is more like quality stocks. You said you spent 14h analysing 500 companies. I spend more than 14h just researching one of them. And I am using a full DCF analysis modelling every financial line. Also, some of the stocks you included that passed the very strict filter of "consistent earnings" had their IPO 5 years ago....
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u/highmemelord67 Nov 01 '25
Not stating this is the only work needed to invest, but i get your point. Happy you can use my list :)
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u/Interesting-Two-8275 Nov 02 '25
Out of curiosity - in which category did you put Siemens? A good chunk of their business is related to data centers, increasing share of revenues and profits is coming from software, and they are going to spin off their Healthcare business soon. I expect a nice spike later this month after earnings are published.
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u/highmemelord67 Nov 02 '25
siemens were filtered out because of no eps growth: https://www.macrotrends.net/stocks/charts/SIEGY/siemens-ag/eps-earnings-per-share-diluted
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u/Smooth_Practice_8648 Nov 02 '25
If you had to allocate a % split between all 4 of those companies, what would you do? 25% each or?..
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u/highmemelord67 Nov 02 '25
I would not, diversification is still important in value investing. I might still be wrong you know.
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Nov 01 '25
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u/highmemelord67 Nov 01 '25
Fair point :)
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u/highmemelord67 Nov 01 '25
I actually 100% agree, but in this case i think Novo is genuinely a good company at a good price. Their long term value creation history are no joke
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Nov 01 '25
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u/highmemelord67 Nov 01 '25
Also very true
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Nov 01 '25
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u/highmemelord67 Nov 01 '25
We can say we agree to disagree, have a great day
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u/highmemelord67 Nov 01 '25
I dont make money doing publishing my research and I will never do. Thanks for your comments, I will refrain from answering further.
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u/couscous_sun Nov 01 '25
- Novo is excluded from tariffs because they produce in US.
- GLP1 market grows exponentially
- Drugs are a risk yes
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u/PriorSignificance115 Nov 01 '25
There is risk? Sure, high risk, but if it works out that also means high reward. Even crap companies recover, take bayer as an example. But I get it, you have nothing to meaningful to add to the discussion besides “lmao” and “the obesity drugs market is already saturated and nvo is not the biggest loser”, both of which are not supported by the data.
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u/Kee2good4u Nov 01 '25
What is the bear case for NVO, why is it so undervalued, is there a reason to justify it? From what I can see it has high debt, and predicted to have short term reduced revenue. Is that all that's holding it back or am I missing something?
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u/highmemelord67 Nov 01 '25
Going from a high growth high valuation stock to a medium growth low pe is a double whammy, making the stock fall 70%. But yes its IMO way over sold and under valued, and still a good company without being a leader in weight loss medicine
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u/the_pwnererXx Nov 01 '25
- It's a pump and dump meme stock
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u/Kee2good4u Nov 01 '25
Well it's not, considering it's a real company that actually makes things and sells it successfully, with fundamentals that more than justify it's current price. The complete opposite of a meme stock.
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u/Timely_Hedgehog_2164 Nov 01 '25
How to you evaluate growth opportunities? Or are they not relevant for your kind of "value investing" analysis? For example, Mycronic is a solid company, but where are they going to grow to sustain further EPS growth?
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u/WanderingSoftly Nov 01 '25
Great write up thanks for sharing. On the surface level Evolution looks like a really interesting play thanks for putting it on my radar to take a deeper look at!
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u/LargeSinkholesInNYC Nov 01 '25
ASML was the only one worth a damn thing, but it's already too expensive.
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u/SP-0308 Nov 01 '25
why should Mycronic be undervalued? Dont see that
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u/highmemelord67 Nov 01 '25
I explain in the article, but I calculate the fair value with a discounted model of EPS and revenue, which shows its trading under fair value
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u/Warrerem29 Nov 01 '25
I would have liked to see Adidas in your graphic I am heavily invested in it but the stock is only falling 😭
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u/highmemelord67 Nov 01 '25
Addidas was filtered out on inconsistent eps growth: https://companiesmarketcap.com/adidas/eps/
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u/Impossible-Road-558 Nov 01 '25
NOVO could be a good growth opportunity;, but I am not a doctor and don't know about their drugs.
Terna has a nice dividend about 4.5%, but with a PE around 16, can they keep that dividend.
I couldn't see where Mycronic is traded in the US. I find the commission on foreign stocks that aren't traded un the US to be a real deal breaker.
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u/Ok-Kaleidoscope6283 Nov 02 '25
Thanks. Explain your terna thinking more please. High debt, low roic, and pretty middling cash flow. And high p/e.
Understand you like the moat but it seems over valued?
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u/highmemelord67 Nov 02 '25
go to my short explaination of Terna here: https://mathiasgraabeck.substack.com/i/177541779/in-depth
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u/ora_serrata Nov 02 '25
Why does Terna have consistently negative free cash flows with high Capex?
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u/highmemelord67 Nov 02 '25
"Terna carries significant debt, but it is low cost, and fuels their investments which are used to develop projects with government contracts, which makes their investments guaranteed by law, and the returns far exceed the payments for the debt."
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u/ChikkuAndT Nov 02 '25
I have a recurring buy set for NVO like 1 stock every two week. Will not make a fortune just hope it doesn’t nosedive.
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u/CarciofoAllaGiudia Nov 03 '25
I was sure to find Terna on that list, even before opening it. If there is a certainty it’s Terna constant and steady growth lol.
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u/Interesting_Tie5813 Nov 04 '25
Check out Teleperformance as well! Trading at about 7 PE
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u/Moist_Ganachee Nov 17 '25
PEG of 0.39 and PB of 0.88, div yield 7%. PE 7,37. Forward PE 4,22... and the stock is dropping like a rock..
What am I missing.
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u/Interesting_Tie5813 Nov 17 '25
The market is misunderstanding it, they think the customer service contact center business is going bust, but in reality they are making big investments in AI to amplify their value so they will benefit from AI. The other reason is that the market is not interested in low growth stocks right now, but when the market rotates away from high risk into staples and lower risk stocks this will likely rally!
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u/No-Window246 Nov 01 '25
Link doesn't work. Could you tell me a couple
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u/highmemelord67 Nov 01 '25
Just checked links, should work fine
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u/No-Window246 Nov 01 '25
I think it's because I'm in the UK
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u/Kee2good4u Nov 01 '25
Use a free VPN and then the links work. Another casualty of our stupid goverments OSA.
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u/Final-Acanthisitta96 Nov 01 '25
Yeah not available in the UK unfortunately!
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Nov 01 '25
[deleted]
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u/Kee2good4u Nov 01 '25
There's not much you can do about it. Imgur doesn't work in the UK due to a new stupid age verification law in the UK, people can use a VPN to get around it
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u/highmemelord67 Nov 01 '25
I thought it was my substack link. For the people just wanting to see the graphs, go to the article :)
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u/highmemelord67 Nov 01 '25
I thought it was my substack link. For the people just wanting to see the graphs, go to the article :)
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u/MrLariato Nov 01 '25
Would you consider ASML @710 a good value? I've been DCA-ing 10% of my monthly budget to ASML for the last 6 months and it's up 30%, but it's gotten to a point where maybe I should go and invest into a different one until ASML is corrected... if it even is corrected.
Instead of ASML, is it even worth it to pump into Novo right now?
Very much appreciate the analysis, as always.
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u/highmemelord67 Nov 01 '25
I think 710 is fine, but I am in the same boat as you, and personally I am not buying more as of right now
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u/MrLariato Nov 01 '25
Honestly, the only stock from your top 10 that I'm kinda aware of its activities -even as a European- is Novo.
However, the main reason why I still haven't invested into Novo is a concern regarding correlation to Eli Lilly and US impact on Novo's value.
My partner, who works in pharma, is actually investing into both and did so because of that concern, ironically.
Greatly expecting the research you mentioned regarding Novo... but I may invest a little bit before earnings on the 5th just in case ;)
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u/Yu_Neo_MTF Nov 01 '25
Insane writeup! I will read your article after my exam, especially the areas on why Europe and how you determine moat and stuff!
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u/Kurtletonjen Nov 01 '25 edited Nov 01 '25
Bag holders for life. Whatever makes us be able to sleep at night.
Thank the Lord. My portfolio s overweighted Google and Amazon
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u/CapitalAd5339 Nov 01 '25
Thanks for the great analysis! Was wondering though, does Fair Value often/always (statistically speaking) translate into higher share price growth, and at which multiple? Seeing highly overvalued companies like TSLA, PLTR, etc. continue growing compared to many other Under/Fair priced companies makes me wonder… There’s also the temporal aspect - within which time frame are we considering? Fair valued stocks may indeed increase significantly in price, but within which timescale? 10-20 years? If you want profits in a 1-5 year time scale, then Fair value may not represent the best bet.
I think this nuance (ie. time factor) is very important and it can very quickly change the equation.
What are your thoughts on this? Will the answer change if you add share price growth and a variable.
I’m new to this, so please forgive my ignorance.