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5 Top Stocks From 5 Countries: Which Offers the Best Valuation?

Published 04/07/2023, 13:53
IT40
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MBGn
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LVMH
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IBE
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AAPL
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MBGAF
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LVMUY
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IBDRY
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RACE
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RACE
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MBGYY
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  • These are companies with the biggest market caps in their respective countries
  • Let's try and find out which ones are worth buying at current levels
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  • Below, we present some of the largest capitalization companies in Italy, France, Spain, Germany, and the United States. Each of these companies holds a significant position in their respective countries' markets. We will evaluate and determine which one ranks as the best, according to InvestingPro. Let's delve into their profiles:

    1. ITALY - FERRARI

    Ferrari (NYSE:RACE) (BIT:RACE), recognized as the world's leading brand, proudly represents Italian heritage on a global scale. While it may not hold the top spot in terms of market capitalization on the FTSE MIB, Ferrari remains a highly influential player.

    Evaluating its quality and financial health, InvestingPro assigns an impressive score of 4 out of 5.

    Ferrari Financial HealthSource: InvestingPro

    One negative factor to consider is the price of Ferrari relative to its intrinsic value. Currently, the stock is trading at a premium of 26% compared to its Fair Value

    Ferrari Fair Value

    Source: InvestingPro

    2. FRANCE - LVMH

    Luxury stock par excellence, LVMH Moët Hennessy Louis Vuitton (OTC:LVMUY) (EPA:LVMH) represents to France what Ferrari represents to Italy, luxury and quality.

    Similarly, LVMH, like Ferrari, shares two notable characteristics. First, it boasts excellent financial health with a score of 4 out of 5. However, it also exhibits a high price relative to its intrinsic value, indicating a potential overvaluation.

    LVMH Financial HealthSource: InvestingPro

    Indeed, it is not surprising that its worst component of financial health is precisely its relative valuation

    LVMH Fair Value

    Source: InvestingPro

    In contrast, the price of LVMH is relatively aligned with its intrinsic value, with a difference of 4.4%. This suggests a more reasonable valuation compared to Ferrari. Notably, analysts remain optimistic about LVMH, as they have set a target of $210 for the company.

    3. GERMANY - MERCEDES

    Continuing with another prominent stock in the luxury automotive sector, Mercedes-Benz Group AG (OTC:MBGAF) (ETR:MBGn) proudly represents Germany in this exclusive ranking. Similar to the previous companies discussed, Mercedes-Benz Group exhibits excellent financial health with a score of 4 out of 5.

    Mercedes Financial HealthSource: InvestingPro

    In contrast to the previous two companies, Mercedes-Benz Group demonstrates a notable difference in valuations, which appear to be significantly more aligned with its intrinsic value. This suggests that the market price of the company reflects a closer approximation of its true worth.

    Mercedes Fair Value

    Source: InvestingPro

    According to InvestingPro, the stock of Mercedes-Benz Group is currently trading at a discount of more than 20%. This discount aligns with the assessments of analysts.

    4. SPAIN - IBERDROLA

    Moving away from the luxury sector, Spain is represented by Iberdrola (OTC:IBDRY) (BME:IBE), a company in the utilities sector. Despite the shift in the industry, it is important to note that this does not imply lower quality.

    In fact, Iberdrola receives a commendable score of 4 out of 5 from InvestingPro, reflecting a well-balanced performance.

    Iberdrola Financial HealthSource: InvestingPro

    In terms of valuation, as shown in the image below, the stock has a downside of 6%. The Intrinsic Value noted by InvestingPro is in line with that attributed by analysts, around $54 per share

    Iberdrola Fair Value

    Source: InvestingPro

    5. UNITED STATES - APPLE

    When discussing the American market, it is impossible to overlook Apple Inc. (NASDAQ:AAPL), which not only stands out as the most representative and largest-capitalized stock but also demonstrates quality attributes.

    InvestingPro assigns Apple a score of 4 out of 5, further affirming its robust performance and financial strength.

    Apple Financial HealthSource: InvestingPro

    However, the recent rise in Apple's stock has made its price significantly higher compared to its actual value. Along with several other prominent U.S. companies, Apple has been a major contributor to the overall growth and recovery of the U.S. stock markets. Unfortunately, this has resulted in the erosion of the margins between its market price and its intrinsic value

    Apple Fair Value

    Source: InvestingPro

    Apple is overvalued by about 18% compared to its Fair Value. It is worth noting that analysts' valuations, which suggest the tech giant could reach around $190 instead of the current price of approximately $160, are more optimistic than InvestingPro's conservative mathematical models.

    In summary, all five stocks listed by InvestingPro demonstrate strong qualitative characteristics. However, with the exception of Mercedes-Benz Group, their valuations appear to be too high. Apple and Ferrari, in particular, stand out as the most overvalued stocks.

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    Disclaimer: This article was written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel, or recommendation to invest nor is it intended to encourage the purchase of assets in any way.

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