As part of my portfolio rebalancing, I've been looking for undervalued European stocks to reduce my exposure to the volatility and concentration risk of US tech, the Thumps USA and USD. After some research, I decided to open a position in French market research leader Ipsos. $IPS (+2,27 %)
Why Ipsos?
The company is one of the world's top three market research firms, operating in 90+ markets with a diversified client base across industries. What caught my attention:
- Valuation: Trading at a P/E ratio around 11-12x, well below many European peers
- Current price: €34 per share - near multi-year lows and significantly discounted from highs
- Dividend yield: Approximately 5%+, providing attractive income while I wait for potential re-rating
- Steady cash generation: Strong FCF margins and consistent profitability in a defensive business model
- Market cap: Roughly €1.5 billion - mid-cap with room to grow
The market research industry is relatively resilient even during economic downturns, as companies still need consumer insights to make informed decisions. Ipsos has also been investing in digital capabilities and data analytics, positioning itself well for the future.
The European angle: While everyone's piling into highly volatile AI-related tech stocks, I'm finding better risk/reward in overlooked European quality stocks trading at reasonable multiples. At €34, Ipsos looks particularly compelling.
What do you think? Anyone else holdin $IPS (+2,27 %) or considering European value plays right now?
Does anyone agree with this choice?