In this article, we discuss the 10 best German stocks to buy now. You can skip our detailed analysis of the best German stocks and go directly to read the 5 Best German Stocks to Buy Now.
Germany is the biggest economy of Europe with 2020 gross domestic product (GDP) of $3.9 trillion and holds a 4.4% share of the global economy. The country also suffered in the face of the global economic clampdown in 2020 due to the novel Covid-19, where its GDP fell by 5% in 2020, as reported by Destatis. However, this loss was considered the least in Europe when compared with Germany’s peers, as the GDP of both Italy and France dropped by 9% in 2020 and the UK reported the worst performance in 300 years, with its economy crashing by 11%.
According to a report by Wall Street Journal, similar is the case with the German stock market as German stocks outperformed their European peers in 2020. Dax Performance Index, which lists 30 German major blue-chip companies, soared 18.50% in the past year when compared with the UK’s FTSE 100 Index, which gained 16.1% during the same period. DAX 30, which lists famous German stocks such as Linde plc (NYSE:LIN), SAP SE (NYSE:SAP), Siemens Aktiengesellschaft (OTCMKTS:SIEGY), Volkswagen AG (ETR:VOW3.DE), and Bayerische Motoren Werke Aktiengesellschaft (ETR:BMW.DE), delivered a 14.02% return in 2021, compared with a 7.83% year to date return of Spain’s Ibex 35.
To provide a more extensive outlook of Germany’s most profitable businesses, Deutsche Börse, a market place organizer for the trading of shares, has announced the expansion of DAX 30 to DAX 40. In this recent development, Dax 30, Germany’s benchmark stock index, will incorporate 10 more largest German companies by market cap, switching the index to DAX 40. As Bloomberg reported, according to JPMorgan Chase & Co., the included companies will exhibit faster growth and value, such as Zalando SE, Hello Fresh SE, Airbus SE, and Siemens Healthineers AG. Moreover, the supplementary companies will add $416 billion to the index’s market value. According to DWS Group, the changes in DAX 30 are made to diversify the index by adding e-commerce and medical technology sectors as well as to gain the attention of international investors.
According to Morgan Stanley, in times of financial uncertainty, investors should look for European stocks, as they have managed to surpass their U.S. counterparts in 2021. This seems viable as the pan-European Stoxx 600 index is up 16.06% in 2021, compared with the Dow Jones Industrial Average’s return of 14.9% in the same time frame. Dow Jones Industrial Average lists some of the most prominent companies on the U.S. stock exchanges, such as The Coca-Cola Company (NYSE:KO), Apple Inc., Johnson & Johnson (NYSE:JNJ), and The Goldman Sachs Group, Inc. (NYSE:GS). The analysts believe that the positive economic impetus in Europe could continue in 2022 as well due to its rapid economic recovery, fueled by stimulus coverage.
Our Methodology:
Let’s analyze the list of the 10 best German stocks to buy now. The stocks mentioned below in the list are the German companies with future growth potential. In addition to this, we took into account hedge fund sentiments, analysts’ ratings, long-term growth potential, and fundamentals while choosing these stocks.
Why pay attention to hedge fund sentiment while choosing stocks?
Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETF. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Best German Stocks to Buy Now
10. Bayerische Motoren Werke Aktiengesellschaft (ETR:BMW.DE)
Number of Hedge Fund Holders: N/A
Bayerische Motoren Werke Aktiengesellschaft (ETR:BMW.DE), commonly known as BMW, is a German manufacturer of luxury cars and motorcycles. The company has headquarters in Munich, Germany, and ranks tenth on our list of the best German stocks to buy now.
In Q2 2021, Bayerische Motoren Werke Aktiengesellschaft (ETR:BMW.DE) reported revenue of €25.5 billion, showcasing a 28.1% year-over-year growth. In the second quarter, the company sold 702,441 units, a 44.7% increase from the prior-year quarter. Moreover, in the first half of 2021, Bayerische Motoren Werke Aktiengesellschaft (ETR:BMW.DE) delivered 1,339,047 BMWs and Rolls-Royce brand vehicles, up 40% from the previous year. Due to solid Q2 earnings, Societe Generale lifted its price target on Bayerische Motoren Werke Aktiengesellschaft (ETR:BMW.DE) to €115, while keeping a ‘Buy’ rating on the shares.
9. Siemens Aktiengesellschaft (OTCMKTS:SIEGY)
Number of Hedge Fund Holders: 3
Siemens Aktiengesellschaft (OTCMKTS:SIEGY) ranks ninth on our list of the best German stocks to buy now. It is a German technology company, focused on industry, transport, infrastructure, and healthcare. The company aims to achieve cleaner and more comfortable transportation and advanced healthcare by using technology efficiently.
Recently, Siemens Aktiengesellschaft (OTCMKTS:SIEGY) has announced plans to expand its U.S. operations by manufacturing over 1 million electric vehicle charges for the country by 2025. For this purpose, the company is also looking for a new facility, which will mark its third eMobility hub in the U.S. In Q3 2021, Siemens Aktiengesellschaft (OTCMKTS:SIEGY) posted revenue of €16.1 billion, up from €12.9 billion from the prior-year quarter, presenting a 24% year-over-year growth. Due to the strong results, the company also raised its full-year 2021 guidance, and now expects net income in between the range of €6.1 billion to €6.4 billion. In August, Morgan Stanley lifted its price target on Siemens Aktiengesellschaft (OTCMKTS:SIEGY) to €160, while keeping an ‘Equal Weight’ rating on the shares.
With over 13.4 million shares, worth $1.06 billion, Ken Fisher’s Fisher Asset Management is the company’s largest shareholder. As of Q2 2021, 3 hedge funds tracked by Insider Monkey have positions in Siemens Aktiengesellschaft (OTCMKTS:SIEGY), worth over $1.07 billion.
In addition to Linde plc (NYSE:LIN), The Coca-Cola Company (NYSE:KO), BioNTech SE (NASDAQ:BNTX), Apple Inc. (NASDAQ:APPL), Deutsche Bank Aktiengesellschaft (NYSE:DB), SAP SE (NYSE:SAP), Johnson & Johnson (NYSE:JNJ), and The Goldman Sachs Group, Inc. (NYSE:GS), investors and analysts are also paying attention to Siemens Aktiengesellschaft (OTCMKTS:SIEGY) amid the company’s long-term growth potential.
8. Spark Networks SE (NYSE:LOV)
Number of Hedge Fund Holders: 6
Spark Networks SE (NYSE:LOV) ranks eighth on our list of the best German stocks to buy now. It is a legal global dating company with headquarters in Berlin, Germany. The company provides a widening portfolio of premium & free apps for its consumers globally.
In Q2 2021, Spark Networks SE (NYSE:LOV) announced growth in Monthly Average Revenue Per User at $20.96, compared with $20.81 during the same period last year. Spark Networks SE (NYSE:LOV) reported revenue of $55.3 million in Q2 and expects full-year 2021 revenue in the range of $219 million to $223 million. In August, B. Riley kept a ‘Buy’ rating on Spark Networks SE (NYSE:LOV), with a $5 price target. The firm’s analyst sees potential in engagement rates and paying subscribers at Zoosk, one of the company’s online dating brands.
Of the 873 hedge funds tracked by Insider Monkey, 6 hedge funds have positions in Spark Networks SE (NYSE:LOV), worth over $32 million. The number of hedge funds having stakes in the company remained the same in the previous quarter. With over 3.7 million shares, worth $19.2 million, Osmium Partners is the company’s leading shareholder.
Like Linde plc (NYSE:LIN), The Coca-Cola Company (NYSE:KO), BioNTech SE (NASDAQ:BNTX), Apple Inc. (NASDAQ:APPL), Deutsche Bank Aktiengesellschaft (NYSE:DB), SAP SE (NYSE:SAP), Johnson & Johnson (NYSE:JNJ), and The Goldman Sachs Group, Inc. (NYSE:GS), Spark Networks SE (NYSE:LOV) is one of the most notable stocks gaining investors’ attention in 2021.
7. MERCK Kommanditgesellschaft auf Aktien (ETR:MRK.DE)
Number of Hedge Fund Holders: N/A
MERCK Kommanditgesellschaft auf Aktien (ETR:MRK.DE), or commonly known as Merck, is a German science and technology company that deals in advanced gene-editing technologies and also manufactures therapies to treat various challenging diseases. The company stands seventh on our list of the best German stocks to buy now.
In Q2 2021, MERCK Kommanditgesellschaft auf Aktien (ETR:MRK.DE) posted an EPS of €2.24, beating the estimates by €0.08. The company’s revenue also presented an 18.2% year-over-year growth at €4.87 billion. Due to strong quarterly earnings, MERCK Kommanditgesellschaft auf Aktien (ETR:MRK.DE) raised its FY21 outlook, and now expects net sales of between €18.8 billion and €19.7 billion. In September, JPMorgan and Barclays reiterated an ‘Overweight’ and an ‘Equal Weight’ rating on MERCK Kommanditgesellschaft auf Aktien (ETR:MRK.DE), respectively.
In addition to Linde plc (NYSE:LIN), The Coca-Cola Company (NYSE:KO), BioNTech SE (NASDAQ:BNTX), Apple Inc. (NASDAQ:APPL), Deutsche Bank Aktiengesellschaft (NYSE:DB), SAP SE (NYSE:SAP), Johnson & Johnson (NYSE:JNJ), and The Goldman Sachs Group, Inc. (NYSE:GS), investors and analysts are also paying attention to MERCK Kommanditgesellschaft auf Aktien (ETR:MRK.DE) amid the company’s long-term growth potential.
6. CureVac N.V. (NASDAQ:CVAC)
Number of Hedge Fund Holders: 12
CureVac N.V. (NASDAQ:CVAC) is a German biotechnology company that develops therapies based on messenger RNA. It is one of the very first companies to use mRNA technology for medical purposes. CureVac N.V. (NASDAQ:CVAC) ranks sixth on our list of the best German stocks to buy now.
Recently, CureVac N.V. (NASDAQ:CVAC) provided the initial preclinical data demonstrating the medical capability of mRNA in the treatment of liver fibrosis. In Q2 2021, CureVac N.V. (NASDAQ:CVAC) posted revenue of €22.4 million and has cash and cash equivalents of €1.36 billion, compared with €1.32 billion as of December 2020. Though the company has slashed its further Covid-19 vaccine production plans, its second-generation vaccine proved its efficacy in immune responses. In July, Berenberg Bank set its price target on CureVac N.V. (NASDAQ:CVAC) at $123, with a ‘Buy’ rating on the shares.
As of Q2 2021, 12 hedge funds tracked by Insider Monkey have positions in CureVac N.V. (NASDAQ:CVAC), up from 9 in the previous quarter. The total value of these stakes is $24.9 million.
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Disclosure. None. 10 Best German Stocks to Buy Now is originally published on Insider Monkey.
