In this article, we discuss the 5 best German stocks to buy now. If you want to read our detailed analysis of German stocks, go directly to the 10 Best German Stocks to Buy Now.
5. Volkswagen AG (ETR:VOW3.DE)
Number of Hedge Fund Holders: N/A
Volkswagen AG (ETR:VOW3.DE) ranks fifth on our list of the best German stocks to buy now. It is a German automotive corporation that is best known for making passenger vehicles. The company was founded in 1937 and expanded its production in the 1950s by introducing the Transporter van.
In Q2 2021, Volkswagen AG (ETR:VOW3.DE) posted revenue of €67.29 billion, showcasing 63.8% year-over-year growth. The company’s global vehicle deliveries grew by 27.9% at 5 million in Q2, which was previously impacted by Covid-19. In its financial report, Volkswagen AG (ETR:VOW3.DE) also reported an 8.8% operating return on sales in the first six months of 2021 and expects the figure to reach 6.0% to 7.5% by the end of the year. In August, Barclays lifted its price target on Volkswagen AG (ETR:VOW3.DE) to €295, while keeping an ‘Overweight’ rating on the shares.
4. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders: 17
SAP SE (NYSE:SAP) is a German software company that develops software solutions used by both small and large corporations. With the help of the company’s software, different organizations of all sizes run their businesses profitably. SAP SE (NYSE:SAP) stands fourth on our list of the best German stocks to buy now.
In August, Oppenheimer assumed its coverage on SAP SE (NYSE:SAP) with an ‘Outperform’ rating and a $155 price target. The firm’s analyst, Ray McDonough sees the opportunity in the company’s services segment and expects the company to carry out multiple expansions in the segment. In Q2 2021, SAP SE (NYSE:SAP) posted an EPS of €1.75, beating the estimates by €0.58. The company also reported an 11% year-over-year growth in cloud revenue at €2.28 billion. SAP SE (NYSE:SAP) gained 17.15% in the past six months and 11.2% year to date.
With 8.8 million shares, worth $1.2 billion, Ken Fisher’s Fisher Asset Management is the company’s largest shareholder. As of Q2 2021, 17 hedge funds tracked by Insider Monkey have positions in SAP SE (NYSE:SAP), worth over $1.6 billion. In the first quarter, 19 hedge funds held stakes in the company, with a total value of $1.47 billion.
Polen Capital, an investment management firm, published its second-quarter 2021 investor letter and mentioned SAP SE (NYSE:SAP) in it. Here is what the firm has to say:
“During the second quarter, the leading absolute contributors to performance (includes) SAP. German enterprise software company SAP was a leading contributor to Portfolio returns in the quarter. Over the last six months, SAP rolled out a new simplified commercial offering aimed at making it easier for their customers to transition their core enterprise resource planning software to the cloud. “Rise with SAP” will encourage customers to consider moving certain workloads to new cloudenabled software. In many cases, SAP customers standardized business processes on SAP software over decades. Contemplating and enacting transformational change is a huge undertaking for these customers. Historically, transitioning to the cloud involves many third-party helpers, so having a single, trusted partner to lead the conversation, design the road map, and own the execution is helpful. Further, as customers shift to the cloud, more peripheral workloads can be handled by SAP, thereby potentially increasing the scale of its relationship with certain customers. Not all legacy customers will adopt SAP’s cloud software, but there could be meaningful performance benefits (quicker innovation, more agility, and mobility, etc.) and cost savings for those that do.
In addition, new customers are coming aboard the SAP cloud platform, which we view as a testament to its leading capabilities. This initiative could drive cloud software revenue growth greater than 20% in the coming years, some of which will cannibalize existing onpremise software sales. That said, the potential net result is attractive and durable growth. We think SAP is capable of doubledigit earnings growth over the coming five-year period.”
3. Deutsche Bank Aktiengesellschaft (NYSE:DB)
Number of Hedge Fund Holders: 20
Deutsche Bank Aktiengesellschaft (NYSE:DB) is a German multinational investment bank and financial services company. The bank derives its strength by focusing on financing, advisory, fixed income, and currencies. Deutsche Bank Aktiengesellschaft (NYSE:DB) ranks third on our list of the best German stocks to buy now.
Recently, Moody’s Investors Services, a credit rating company, upgraded Deutsche Bank Aktiengesellschaft’s (NYSE:DB) outlook to positive due to the bank’s progress towards its medium-term targets. In Q2 2021, Deutsche Bank Aktiengesellschaft (NYSE:DB) reported revenue of €6.24 billion, beating the estimates by €310 million. The company reported year-over-year growth across all of its segments and expects FY21 revenue to be ahead of its guidance. In August, Keefe Bruyette upgraded Deutsche Bank Aktiengesellschaft (NYSE:DB) to ‘Market Perform’ with a €13 price target, up from €12. Since the beginning of the year, Deutsche Bank Aktiengesellschaft (NYSE:DB) delivered a 21.28% return to shareholders, while the stocks gained 43.1% in the past year.
As of Q2 2021, 20 hedge funds tracked by Insider Monkey have positions in Deutsche Bank Aktiengesellschaft (NYSE:DB), worth $1.86 billion. In the previous quarter, 16 hedge funds held stakes in the company, valued at over $1.7 billion. Hudson Executive Capital is the company’s leading shareholder with 67.3 million shares, worth $877.9 million.
2. BioNTech SE (NASDAQ:BNTX)
Number of Hedge Fund Holders: 20
BioNTech SE (NASDAQ:BNTX) is a German biotechnology company that develops and manufactures novel therapies for cancer and other serious diseases. The company utilizes advanced technological discoveries and therapeutic drug platforms for the rapid development of novel biopharmaceuticals. BioNTech SE (NASDAQ:BNTX) stands second on our list of the best German stocks to buy now.
In August, UBS lifted its price target on BioNTech SE (NASDAQ:BNTX) to $300 from $111 and named the company as a crucial player in the Covid-19 vaccine space. The firm’s analyst, Eliana Merle noted that the company could benefit from continued boosted shots. In Q2 2021, BioNTech SE (NASDAQ:BNTX) posted revenue of €5.3 billion, up from €41.7 million during the same period last year. The company also reported estimated vaccine revenue of €15.9 billion of 2.2 billion signed supply contracts of Covid-19 vaccine doses. BioNTech SE (NASDAQ:BNTX) targets the manufacturing capacity of 3 billion to 4 billion doses of Covid-19 vaccines for the year 2022. BioNTech SE (NASDAQ:BNTX) jumped from $66.6 in September 2020 to $346.9 in September 2021, gaining 418.4% in the past year.
As of Q2 2021, 20 hedge funds tracked by Insider Monkey have positions in BioNTech SE (NASDAQ:BNTX), up from 18 in the previous quarter. The total value of these stakes is $579.1 million. With over 1.2 million shares, worth $276.7 million, Coatue Management is the company’s leading shareholder.
Artisan Partners recently released its Q2 2021 investor letter and mentioned BioNTech SE (NASDAQ:BNTX) in it. Here is what the firm has to say:
“Among our top contributors as BioNTech. Shares of BioNTech doubled in Q2 as the scientific and commercial success of the company’s highly effective COVID-19 mRNA vaccine came into sharper focus. The emergence of mRNA vaccines—which instruct cells to make a protein to trigger an immune response instead of putting a weakened or inactivated germ into our bodies—from BioNTech, Pfizer and Moderna have proven instrumental in combatting the COVID-19 pandemic. The companies’ compelling clinical data have made mRNA vaccines the preferred shots globally, prompting BioNTech and its partner Pfizer to expand manufacturing capacity rapidly to keep up with demand. The company now expects to be able to supply up to three billion doses in 2021, a remarkable achievement.
While we have long admired BioNTech’s management, technology platform and deep pipeline of novel cancer therapies, the dramatic stock price increase in Q2 causes some challenges. On one hand, the company is now in an incredibly strong financial position—profits from COVID-19 vaccines will likely give BioNTech massive cash reserves with which to invest aggressively in the broader potential of mRNA therapeutics. On the other hand, we can expect COVID-19 sales to decline sharply longer term, though the shape of this curve is up for debate based on how often booster shots will be needed. We are being prudent in our effort to appraise and value the windfall of profits over the intermediate term while balancing the potential for declining profits for several years post-pandemic (even if the company’s cancer pipeline progresses nicely). We have trimmed our position size to manage this risk accordingly.”
1. Linde plc (NYSE:LIN)
Number of Hedge Fund Holders: 55
Linde plc (NYSE:LIN) tops our list of the best German stocks to buy now. It is a global multinational industrial gases and engineering company that has been utilizing the power of hydrogen for over 100 years. Linde plc (NYSE:LIN) is the global leader in the production, processing, and distribution of hydrogen.
Recently, Linde plc (NYSE:LIN) announced the expansion of its production capacity in Florida, U.S. to meet the demand for industrial gases. The project is expected to be completed in 2023. In Q2 2021, Linde plc (NYSE:LIN) posted an EPS of $2.70, beating the consensus by $0.17. The company reported revenue of $7.6 billion, presenting a 19.1% year-over-year growth. After solid quarterly earnings, Linde plc (NYSE:LIN) raised its full-year 2021 guidance and now expects adjusted EPS between $10.10 and $10.30 versus estimates of $10.04. In August, JPMorgan and Wells Fargo lifted their price targets on Linde plc (NYSE:LIN) to $356 and $360, respectively. Both the firms keep an ‘Overweight’ rating on the company’s shares. Since the beginning of the year, Linde plc (NYSE:LIN) delivered a 20.7% return to shareholders, while its 12-month returns came in at 24.6%.
Of the 873 hedge funds tracked by Insider Monkey, 55 hedge funds have positions in Linde plc (NYSE:LIN), worth over $5.9 billion. In Q1 2021, 43 hedge funds had positions in the company, with a total value of $4.63 billion.
You can also take a look at 10 Best Undervalued Dividend Stocks to Buy Now and 10 Stocks that Released Solid Quarterly Earnings
