In this article, we discuss the 11 best German stocks to buy now.
Germany is the largest economy by Gross Domestic Product (GDP) in Europe, even though several financial markets of the country are actually smaller than those of neighboring France and the UK. Germany has the eighth-highest share of the global equity markets, a somewhat interesting number given the strength and power it enjoys on the world stage. It has been observed that retail investors in the country are often more hesitant to invest in stocks than in countries like the United Kingdom or United States.
This is partly due to the fact that Germany has a more generous government pension system than the rest of the world, but another reason for this lies in the nature of the German economy. The contribution of manufacturing to total GDP is proportionally larger in Germany than other countries, lowering the centrality of the stock market for generating revenue. The largest stock market in Germany is the Frankfurt Stock Exchange, an international trading center, one of the largest for securities in the world.
In total, the country has seven stock exchanges with a share in turnover of around 90 per cent. In this capacity, it ensures the functioning of exchange trading. Of the approximately 200 market participants, roughly half are from countries other than Germany. The total market capitalization of the Frankfurt Stock Exchange amounts to around two trillion euros. The traditional trading floor of the Börse Frankfurt, and the Xetra electronic trading system, are two main parts of the Frankfurt Stock Exchange.
Even though the Frankfurt Stock Exchange is not the largest in Europe, it is considered one of the most important financial hubs in the region due to the economic integration created by the euro. According to the World Bank, a collection of development indicators show that the stock market returns in Germany were around 23.68 % in 2021. As per a report by the global body, the Germany Stock Market Index (DE40) is expected to trade at 13,972.81 points by the end of this quarter.
However, the German markets have also come under pressure from economic uncertainty. The import-export numbers, closely tied to the stock market, are especially telling. Recent data shows the German October import price index rose by 23.5% year-on-year, falling back from the 29.8% year-on-year gain in September, registering the slowest pace of increase in a year. The German market is also staring at the biggest decline it has seen in nine months as October exports fell 0.6% month-month, weaker than expectations of a 0.2% fall month-on-month.
Imports fell 3.7% month-month as well, weaker than expectations of a 0.5% month-on-month decline. For investors who are tired of boring, albeit rewarding investments in giants like Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), and PayPal Holdings, Inc. (NASDAQ:PYPL), it might be prudent to invest in the German economy. Some top German firms are trading on exchanges in the United States. Some of these are discussed in detail below.
Our Methodology
The companies that are based in Germany were selected for the list. Special importance was assigned to outlining the basic business fundamentals and analyst ratings for each firm to provide readers with some context so they can make more informed investment choices. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
Photo by Jacek Dylag on Unsplash
Best German Stocks to Buy Now
11. voxeljet AG (NASDAQ:VJET)
Number of Hedge Fund Holders: N/A
voxeljet AG (NASDAQ:VJET) provides three-dimensional (3D) printers and on-demand parts services to industrial and commercial customers in Europe, the Middle East, Africa, the Asia Pacific, and the Americas. The firm also sells consumables, including particulate materials and proprietary chemical binding agents, maintenance contracts, extended warranty contracts, and spare parts related to these products.
On November 18, Alliance Global Partners analyst Brian Kinstlinger maintained a Buy rating on voxeljet AG stock and lowered the price target to $8 from $10, noting that the company received orders for seven new 3D printers during Q3, which resulted in a record backlog of EUR 13.7 million.
10. Biofrontera Inc. (NASDAQ:BFRI)
Number of Hedge Fund Holders: 2
Biofrontera Inc. (NASDAQ:BFRI) is a biopharmaceutical company that engages in the commercialization of pharmaceutical products for the treatment of dermatological conditions in the United States. On September 6, Biofrontera said it had been granted a notice of allowance by the US patent body for a patent covering a nanoemulsion formulation. The US Patent and Trademark Office granted patent application number 12/520,759 titled Nanoemulsion Formulation with Improved Stability and Cell Penetration.
At the end of the third quarter of 2022, 2 hedge funds in the database of Insider Monkey held stakes worth $111,000 in Biofrontera Inc., compared to 3 in the preceding quarter worth $1.6 million.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Schonfeld Strategic Advisors is a leading shareholder in Biofrontera Inc. with 91,300 shares worth more than $96,000.
Unlike Amazon.com, Inc., Alibaba Group Holding Limited, and PayPal Holdings, Inc., Biofrontera Inc. is one of the more adventurous stocks trading on the US stock exchanges.
9. Mynaric AG (NASDAQ:MYNA)
Number of Hedge Fund Holders: 3
Mynaric AG (NASDAQ:MYNA) engages in developing and manufacturing advanced laser communication technology for long-distance data transmission between moving objects for wireless terrestrial, airborne, and space applications in Germany and internationally. On October 18, Mynaric unveiled that it will provide defense firm Northrop Grumman with optical communications terminals for 14 satellites under the Space Development Agency’s Tranche 1 Tracking layer problem. Each satellite will feature three optical communications terminals.
On October 26, Canaccord analyst Austin Moeller maintained a Buy rating on Mynaric AG (NASMYN:MYNA) stock and lowered the price target to $20 from $27, noting that the company recently released new guidance, raising its backlog expectations and reaffirming its cash-in from customer contract expectations for 2022.
At the end of the third quarter of 2022, 3 hedge funds in the database of Insider Monkey held stakes worth $4.5 million in Mynaric AG, compared to 4 in the previous quarter worth $7.85 million.
8. VIA optronics AG (NYSE:VIAO)
Number of Hedge Fund Holders: 3
VIA optronics AG (NYSE:VIAO) provides display solutions worldwide. On November 23, VIA optronics AG posted earnings for the third quarter of 2022, reporting losses per share of €0.27. The revenue over the period was €62.9 million, up 27.3% compared to the revenue over the same period last year.
On September 30, Craig-Hallum analyst Anthony Stoss maintained a Buy rating on VIA optronics AG stock and lowered the price target to $3 from $5, noting that the company’s revenues were slightly above guidance for the third quarter but continued supply shortages and lingering logistics challenges weighed on gross margins.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Royce Associates is a leading shareholder in VIA optronics AG with 1.4 million shares worth more than $2.3 million.
At the end of the third quarter of 2022, 3 hedge funds in the database of Insider Monkey held stakes worth $4.3 million in VIA optronics AG, the same as in the preceding quarter worth $5.7 million.
7. Spark Networks SE (NASDAQ:LOV)
Number of Hedge Fund Holders: 5
Spark Networks SE (NASDAQ:LOV) operates online dating sites and mobile applications. On November 8, Spark Networks SE reported financial results for its third quarter ended September 30, 2022. Revenue was $48.2 million, compared to $53.3 million in the third quarter of 2021. On a constant currency basis, revenue would have been $51.5 million in the third quarter of 2022. Net loss was $10.7 million, including an $11.8 million non-cash impairment charge to the Zoosk trade name, compared to a net loss of $2.7 million in the third quarter of 2021.
At the end of the third quarter of 2022, 5 hedge funds in the database of Insider Monkey held stakes worth $12.5 million in Spark Networks SE, compared to 5 in the preceding quarter worth $20.8 million.
Among the hedge funds being tracked by Insider Monkey, California-based investment firm Osmium Partners is a leading shareholder in Spark Networks SE with 5.6 million shares worth more than $10 million.
6. MYT Netherlands Parent B.V. (NYSE:MYTE)
Number of Hedge Fund Holders: 5
MYT Netherlands Parent B.V. (NYSE:MYTE) operates a luxury e-commerce platform for fashion consumers in Germany, the United States, the rest of Europe, and internationally. On November 8, MYT Netherlands Parent posted earnings for the first quarter of 2022, reporting losses per share of €0.04. The revenue over the period was €175.9 million, up 11.5% compared to the revenue over the same period last year.
On September 20, analyst Kunal Madhukar maintained a Buy rating on MYT Netherlands Parent B.V. stock and raised the price target to $16 from $14, noting that despite the company’s mixed fourth-quarter results, the dip in the stock price creates a buying opportunity.
At the end of the third quarter of 2022, 5 hedge funds in the database of Insider Monkey held stakes worth $44.85 million in MYT Netherlands Parent B.V., compared to 6 in the preceding quarter worth $36.8 million.
Among the hedge funds being tracked by Insider Monkey, Hong Kong-based investment firm Sylebra Capital Management is a leading shareholder in MYT Netherlands Parent B.V. with 3.7 million shares worth more than $43 million.
In contrast to Amazon.com, Inc., Alibaba Group Holding Limited, and PayPal Holdings, Inc., MYT Netherlands Parent B.V. is one of the more adventurous stocks trading on the US stock exchanges.
5. MorphoSys AG (NASDAQ:MOR)
Number of Hedge Fund Holders: 5
MorphoSys AG (NASDAQ:MOR) is a commercial-stage biopharmaceutical company that engages in the discovery, development, and commercialization of therapeutic antibodies for patients suffering from cancer and autoimmune diseases in the United States. On November 16, MorphoSys posted earnings for the third quarter of 2022, reporting losses per share of €3.60. The revenue over the period was €95.8 million, up 132.5% compared to the revenue over the same period last year.
On November 18, JMP Securities analyst Jason Butler maintained an Outperform rating on MorphoSys AG stock and lowered the price target to $15 from $32, noting that despite the recent disappointment on partnered programs, the company continues to execute well on proprietary pipeline opportunities with continued enrollment in late-stage trials for pelabresib.
At the end of the third quarter of 2022, 5 hedge funds in the database of Insider Monkey held stakes worth $10 million in MorphoSys AG, compared to 2 in the previous quarter worth $8.6 million.
4. Fresenius Medical Care AG & Co. KGaA (NYSE:FMS)
Number of Hedge Fund Holders: 13
Fresenius Medical Care AG & Co. KGaA provides dialysis care and related dialysis care services in Germany, North America, and internationally. On August 30, Fresenius announced that it had been awarded a contract from the US Department of Veterans Affairs to provide dialysis services to military veterans. According to the contract, Fresenius will help treat more than 35 thousand military veterans getting dialysis from the VA.
On November 9, Credit Suisse analyst Christoph Gretler maintained a Neutral rating on Fresenius Medical Care AG & Co. stock and lowered the price target to EUR 32 from EUR 37.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Pzena Investment Management is a leading shareholder in Fresenius Medical Care AG & Co. KGaA with 13 million shares worth more than $184 million.
In its Q3 2022 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Fresenius Medical Care AG & Co. KGaA was one of them. Here is what the fund said:
“We exited our position in Fresenius Medical Care AG & Co. KGaA, a vertically integrated provider of dialysis equipment and services. The company has experienced headwinds related to the pandemic, most notably due to the higher mortality rates found among dialysis patients. We anticipated the business would recover post-COVID and benefit from the secular growth of its end markets; however, the company has also suffered from cost inflation pressures and reimbursement challenges. Based on these factors, we chose to sell our remaining shares in favor of better opportunities.”
3. Deutsche Bank Aktiengesellschaft (NYSE:DB)
Number of Hedge Fund Holders: 14
Deutsche Bank Aktiengesellschaft (NYSE:DB) provides investment, financial, and related products and services to private individuals, corporate entities, and institutional clients worldwide. On November 25, Deutsche Bank Aktiengesellschaft said it was selectively hiring in its deals business in Asia, as activity in parts of the region was seeing strong growth. On October 20, Deutsche Bank said that it had laid off 20 New York-based junior bankers and several senior staff within the lender’s Origination & Advisory business.
On November 11, analyst Amit Goel maintained an Equal Weight rating for Deutsche Bank Aktiengesellschaft stock and raised the price target to EUR 11.50 from EUR 11.
At the end of the third quarter of 2022, 14 hedge funds in the database of Insider Monkey held stakes worth $766.8 million in Deutsche Bank Aktiengesellschaft, compared to 16 in the previous quarter worth $934.8 million.
In its Q3 2021 investor letter, Third Avenue Management, an asset management firm, highlighted a few stocks and Deutsche Bank Aktiengesellschaft was one of them. Here is what the fund said:
“Deutsche Bank Aktiengesellschaft (4.5% portfolio weight) – Similarly, Deutsche Bank has in recent years undertaken profound cost-cutting initiatives, albeit, in Deutsche’s case, as a result of the scandal, business underperformance and a need to deleverage. Deutsche Bank, and other investment banks with large fixed-income trading operations, clearly benefited from the pandemic in 2020 as a result of unusually large fixed-income trading volumes and market volatility. This is one of the primary arguments for having trading operations alongside more traditional banking and asset management businesses—i.e., that their business performances are not correlated and strong trading performance can, at times, offset challenges in other parts of the business. And times are still challenging for Deutsche’s more traditional corporate and private banking businesses as a result of the interest rate environment. Clearly, a higher (or even less negative) German rate environment would help, but it must be said that Germany has to be among the least attractive banking markets in Europe. The industry structure is unique and frustrates the ability of private banks to produce profit, which in turn limits the ability to accumulate capital, making the entire system more fragile than it ought to be. We value Deutsche’s various banking business lines accordingly. But, turning back to things Deutsche can control, it is indisputable that Deutsche, under CEO Christian Sewing, has made considerable progress towards its critical cost-cutting, deleveraging and capital accumulation goals. At the outset of our investment in Deutsche, our single largest concern was that the bank’s necessary exit from certain lines of business, along with sizeable headcount reduction in others, could cause clients to seek other relationships with banks offering a full range of services and without any perception of counter-party risk. In a worst-case scenario, the result could have been an erosion of revenue even faster than the cost reduction, possibly precipitating a downward spiral. As we emerge from the pandemic with Deutsche now far down the road of transformation, and clear evidence that it is regaining market share in various lines of business, the largest risks appear to be behind us. To that point, in recent public comments, Deutsche management has indicated that it intends to resume returning excess capital to shareholders in 2022.”
2. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders: 17
SAP SE (NYSE:SAP) operates as an enterprise application software company worldwide. On October 25, SAP SE posted earnings for the third quarter of 2022, reporting earnings per share of $1.12, missing market estimates by $0.13. The revenue over the period was €7.84 billion, up 14.6% compared to the revenue over the same period last year and beating market estimates by €240 million.
On December 2, Stifel analyst Brad Reback maintained a Buy rating on SAP SE stock and raised the price target to EUR 135 from EUR 130.
Among the hedge funds being tracked by Insider Monkey, Washington-based firm Fisher Asset Management is a leading shareholder in SAP SE with 6.8 million shares worth more than $549.6 million.
In its Q3 2022 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and SAP SE was one of them. Here is what the fund said:
“SAP SE is Europe’s largest software company and the global leader in enterprise resource planning (ERP) software. ERP is a software category that is particularly critical to business functions, and, therefore, has high retention rates even in times of economic stress. For the past several years, SAP has been going through several transitions, including moving to cloud-based SaaS (Software as a service) solutions and an initiative to better integrate its various software solutions. In recent quarters, we have seen increasing evidence that both transitions are being successfully executed, and the result should be a faster-growing, more consistent, higher margin, and more advantaged business. As investment costs from these transition programs wane, and as the benefits of higher growth continue, we expect that earnings will grow at a double-digit rate from next year (2023) onwards. In light of this, we believe the valuation is very attractive for long-term investors.”
1. BioNTech SE (NASDAQ:BNTX)
Number of Hedge Fund Holders: 18
BioNTech SE (NASDAQ:BNTX) is a biotechnology company that develops and commercializes immunotherapies for cancer and other infectious diseases. On November 30, BioNTech revealed that it has signed a collaboration and license agreement for a small molecule program targeting immune modulation in cancer with Poland-based Ryvu.
On November 8, Canaccord analyst William Maughan maintained a Buy rating on BioNTech SE stock and lowered the price target to $191 from $200, noting that the company’s third-quarter results show steady commercial success and advancing pipeline.
At the end of the third quarter of 2022, 18 hedge funds in the database of Insider Monkey held stakes worth $186 million in BioNTech SE, compared to 26 in the preceding quarter worth $380.5 million.
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This article is originally published at Insider Monkey.
