The Swiss market closed slightly higher on Friday after a somewhat choppy session, with investors reacting mainly to earnings reports and improved consumer sentiment. In this context of cautious optimism, identifying undervalued stocks can offer potential capital growth opportunities for sophisticated investors.

The 10 most undervalued stocks in Switzerland based on cash flows

Click here to see the full list of 18 stocks from our Undervalued SIX Swiss Exchange Stocks Based on Cash Flows screener.

We examine a selection of our screener results.

Overview: Partners Group Holding AG is a private equity firm specializing in direct, secondary and primary investments in private equity, real estate, infrastructure and debt and has a market capitalization of CHF 29.20 billion.

Operations: The revenue segments include CHF 1.17 billion from private equity, CHF 379.20 million from infrastructure, CHF 211.30 million from private credit and CHF 186.90 million from real estate.

Estimated discount to fair value: 14.2%

Partners Group Holding AG (PGHN) trades at CHF 1124, which is 14.1% below its estimated fair value of CHF 1309.09 based on discounted cash flow analysis. The company’s earnings are expected to grow at 13.5% per year, outperforming the Swiss market’s average growth rate of 9.1%. Despite high debt and a 3.47% dividend yield that is not well covered by either earnings or free cash flows, PGHN’s strong revenue growth and robust return on equity projections make it an attractive candidate for undervalued stocks based on cash flows in Switzerland.

Overview: Straumann Holding AG, with a market capitalization of CHF 17.78 billion, offers dental prostheses and orthodontic solutions worldwide.

Operations: Straumann Holding AG’s revenue segments include CHF 1.17 billion from sales in Europe, the Middle East and Africa (EMEA), CHF 1.20 billion from operations, CHF 793.05 million from sales in North America (NAM), CHF 451.27 million from sales in Asia-Pacific (APAC) and CHF 265.82 million from sales in Latin America (LATAM).

Estimated discount to fair value: 20.6%

Straumann Holding (CHF 111.5) is trading 20.6% below its estimated fair value of CHF 140.38, suggesting the company may be undervalued based on cash flows. The company’s earnings are expected to grow significantly by 20.84% ​​per year, outperforming the Swiss market’s average growth rate of 9.1%. However, profit margins have fallen from 18.7% to 10.2%, and large one-off items have impacted financial results, which investors should consider when evaluating the stock’s potential.

Overview: Temenos AG develops, markets and sells integrated banking software systems to financial institutions worldwide and has a market capitalization of CHF 4.04 billion.

Operations: Temenos AG’s revenue segments include software licenses (USD 383.54 million), maintenance (USD 437.46 million) and services (USD 293.10 million).

Estimated discount to fair value: 30.3%

Temenos (CHF 55.75) is trading 30.3% below its estimated fair value of CHF 79.95, potentially undervalued on a cash flow basis. Recent management appointments are aimed at driving growth in the SaaS and US markets, while the company is considering selling its fund management unit for €600 million to strengthen finances. Despite a slight decline in net profit in the second quarter, earnings growth is expected to be 14.32% per year, faster than the Swiss market average of 9.1%.

Key findings

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This Simply Wall St article is of a general nature. We comment based solely on historical data and analyst forecasts, using an unbiased methodology. Our articles are not intended as financial advice. They do not constitute a recommendation to buy or sell stocks and do not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.

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