Opportunity on the Euronext: Delta Lloyd

Filed under: International Markets, Stocks to Buy

Investors searching for opportunities will be hard pressed to find stocks that are still undervalued. It seems like this rally has pushed every sector to very high levels. Perhaps, it may be time to look in more off-the-cuff places for investment ideas.

One possibility trades on the Amsterdam-based exchange, the Euronext. The Dutch insurer, Delta Lloyd Group, which has operations in the Netherlands, Germany, and Belgium, is a profitable company with a favorable balance sheet that trades at a significant discount to its book value. In the first half of 2010, it generated €767 million of income after taxes and non-controlling interests, a 263% increase. At the same time, it has €3,903 billion in tangible assets net of all liabilities, but a market cap of just € 2,810 billion as of January 11. In other words, investing in Delta Lloyd is like buying assets, with all liabilities paid off, at a 30% discount.

This alone is not enough to make it a suitable investment. After all, a number of financial companies also trade below their book value, why not buy those? There are a few key distinctions that make this Dutch insurer a much safer bet than most other seemingly-similar stories.

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Opportunity on the Euronext: Delta Lloyd originally appeared on BloggingStocks on Wed, 12 Jan 2011 16:00:00 EST. Please see our terms for use of feeds.

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