Dusseldorf Despite high energy prices, a shortage of gas and supply bottlenecks, some companies from the leading German index are getting through the crisis comparatively well. At the moment there is much to suggest that the 40 Dax companies will be able to repeat their record profits of 129 billion euros from the previous year in 2022. The high profits, in turn, mean that some Dax companies and their shares are currently undervalued.
In the new episode of Handelsblatt Today Extended, stock analyst Ulf Sommer and host Lena Jesberg talk about Dax values, which are currently valued cheaply. In particular, Sommer counts the automotive stocks Volkswagen, BMW and Mercedes. However, investors should heed certain warning signals: “The companies may earn more, but many investors see problems looming: Especially with such high profits and dependence on China, many think that they can do worse in the future.”
Stocks that are heavily dependent on the economy should be treated with caution. However, it is not the case that the valuations of so-called cyclical stocks such as BASF always fall when the economy cools down. “Cyclical stocks fall when investors expect the economy to slow down. That’s a big difference,” Sommer notes.
In principle, ETFs are significantly better than individual shares in terms of the risk-reward ratio. “However, I admit: individual titles are like the salt in the soup and make investing more exciting overall,” says Sommer.
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More: Skepticism despite record profits – Dax companies are undervalued
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