The DAX apparently made a new 52-week low at the end of the week, at least temporarily. Our leading domestic index has fallen as low as 12,180 points, reaching a price level we have not yet seen this trading year.
There may of course be additional disadvantages, no doubt. But the DAX at such a low score also means that we can buy top stocks at a low price. Today let’s take a look at two exciting names that I would now find quite interesting.
DAX at 52-week low: top share Munich Re!
A first top stock I’d like to highlight again on the DAX at 52-week lows is that Munich Re (WKN: 843002). Foolish investors probably know the general benefits. For example, the dividend, which has not been reduced since 1969, or the overall timeless business model of reinsurance that made this payout possible. But the current context is also relevant.
Munich Re stock is valued at a share price of around EUR 250 with a price/earnings ratio of around 12. At the same time, there is currently a dividend yield of around 4.4%, which is also attractive. The game changer, however, is that the management of the DAX reinsurance company expects profits to grow to 3.3 billion euros. This should further improve the rating.
The dividend should therefore continue to grow in the future. As a result of the correction in the DAX, Munich Re’s top share fell again. At this price level, we can buy the shares back at an interesting discount.
Zalando: not so much value, but cheap!
Zalando (NYSE:DAX) is another top stock I would revisit on the DAX with a 52-week low. The share certificates are currently traded at a share price of EUR 19.55. Even the 20 euro mark has been broken through, leading to an even lower market value.
Currently, the market value is only 5.1 billion euros. Based on annual sales of over 10 billion euros, the price-to-sales ratio is now less than 0.5. It’s really cheap. Although there is a reason for this: inflation means that costs explode and the bottom line is burdened. At the same time, the unclear consumption outlook dampens growth, and 2022 is more likely to stagnate.
It remains to be seen whether the medium-term forecast up to 2024 with a target for gross merchandise volume of EUR 30 billion to EUR 20 billion is still sustainable. Nevertheless, the mere expression of this forecast shows that the market top has not been reached in the medium to long term. Going cheap now might have been a smart move in five years or so. Especially since a price-to-sales ratio of less than 1 is actually pretty cheap for a growth stock.
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Vincent owns shares in Munich Re and Zalando. The Motley Fool owns shares in and recommends Zalando.