We recently published a list of 12 Best German Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where MYT Netherlands Parent (NYSE:MYTE) stands against other best German stocks to buy according to hedge funds.
Germany’s economy is facing continued weakness. According to a report published by Roland Berger, the 0.1% contraction in 2023 and the 0.2% in 2o24 will only be countered by a 0.4% projected growth in 2025. While manufacturing orders are recovering modestly since June last year, business sentiments are still low and the industrial production for November was down 3,1% year-over-year. Unemployment also reached 2.81 million in December 2024, which was a 170,000 increase as compared to the same period last year. This pushed the unemployment rate to 6%. Inflation is now expected to average 2% in 2025, which is still down from the 2.2% figure from 2024.
Earlier on March 6, Chris Verrone, Strategas, joined CNBC’s ‘Fast Money’ to express his bullish outlook on the European market. He highlighted a shift in global cyclicality eastward and observed that the European industrials are achieving new highs. Verrone emphasized that the European banks have shown strength over the past 18 months but despite such trends, investors are still not heavily leaning towards European equities. He cited the German ETF under the name of EWG to support his stance, as EWG broke a 20-year high which indicated its departure from prolonged secular stagnation particularly within banks and industrials. However, he did note that energy and basic resources are not showing the same momentum.
The conversation also covered the fact that investors have been overweight in US large-cap tech stocks over the past 12 to 13 years. Verrone relayed that observed extreme bearishness towards the European market as of December 2024, when he visited the region. He particularly noted that peripheral European markets, which include countries like Italy and Spain, have been leading. Whereas Germany has lagged. While Verrone mentioned that he heard Christine Lagarde, President of the European Central Bank, expressed pessimism about the European economy herself during the world economic forum in Davos, he still maintains his bullish outlook. He thinks that the European economic data is improving and global cyclicality has not been extinguished.
Our Methodology
We used the Finviz stock screener to compile an initial list of top German stocks. We then selected 12 German stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A smartly dressed woman browsing a selection of designer clothing in an upscale retail store.
MYT Netherlands Parent (NYSE:MYTE)
Number of Hedge Fund Holders: 9
MYT Netherlands Parent (NYSE:MYTE) operates Mytheresa, which is a global luxury e-commerce platform that offers high-end fashion. It encompasses womenswear, menswear, and lifestyle products available through online and retail channels. Its business model focuses on curating exclusive collections and providing a premium shopping experience to a high-income clientele.
Mytheresa’s core business segment is its luxury multi-brand digital platform. The company reported a 13.4% year-over-year increase in net sales for FQ2 2025 and reached €223.0 million. It saw an 11.9% increase in Gross Merchandise Value (GMV) to €244.7 million. This growth is attributed to Mytheresa’s focus on high-spending and wardrobe-building customers, which resulted in a 13.6% increase in GMV per top customer. The platform’s Average Order Value (AOV) also saw a 9.5% increase to €736.
The company’s strategic initiatives, which include exclusive capsule collection launches with luxury brands, expansion of its fine jewelry offerings, and impactful top customer events, are driving customer engagement and sales. Mytheresa is expanding its presence in the US, with net sales in the region growing by 17.6%. The company anticipates GMV and net sales growth of 7% to 13% for the full fiscal year 2025.
Minot Light Capital is highly optimistic about MYT Netherlands Parent’s (NYSE:MYTE) future due to its strategic acquisition of YNAP and strong financial position. It stated the following regarding the company in its Q4 2024 investor letter:
“MYT Netherlands Parent B.V. (NYSE:MYTE) is currently our partnership’s largest holding and is poised to become a leading curated digital platform for high-end luxury fashion. The company has executed in a consistent and thoughtful manner throughout a meaningful consumer and luxury downturn over the past few years, which has led to a more rational competitive environment. However, the stock has become our largest position due to a game-changing acquisition of YOOX NET-A-PORTER (YNAP) from Richemont (SWX: CFR). For a variety of reasons, Richemont was highly motivated to divest YNAP, and MyTheresa was the only logical and willing acquirer due to the substantial synergies it could bring to the transaction. When the deal was announced, we had a small position in MYTE and it’s market cap was about $340mm (85mm S/O at $4.00/share) with about $15mm of net debt on it’s balance sheet. In exchange for taking on YNAP, Richemont put a cash position of 550mm Euros and no debt on YNAP’s balance sheet, provided a 100mm Euro revolving credit facility to YNAP/MyTheresa, and took a 33% equity stake in the pro-forma combined company.
Hence, in exchange for the issuance of about 42mm shares to Richemont ($172mm of value at the time of deal announcement), MYTE was able to acquire the highly synergistic Net-a-Porter and Mr. Porter luxury marketplaces that had a combined 1.2bln Euros of GMV (vs MYTE’s GMV of about 900mm Euros), the 900mm Euro GMV Yoox and Outnet discount marketplaces, and 550mm Euros of cash. The Net-a-Porter and Mr. Porter brands are currently profitable and should become even more so post-synergies when combined with MyTheresa. The outlet brands (Yoox & Outnet) are currently burning cash, which is the main reason Richemont provided MYTE with 550mm Euros on the transaction. We believe management will determine relatively quickly whether it can turn around the outlet business. If not, we think MyTheresa will shut down that entire business and can likely do so well before burning the 550mm Euro cash position…” (Click here to read the full text)
Overall, MYTE ranks 8th on our list of best German stocks to buy according to hedge funds. While we acknowledge the growth potential of MYTE, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MYTE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.