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Francesco Bergamini, Representative of Freedom24 in Italy (tied agent of Freedom Finance Europe Ltd. in Italy), has picked out four European companies that rarely make the headlines. According to Francesco, the reason so many names like these go unnoticed has less to do with their results than with market structure: capital keeps flowing into funds and ETFs, which mechanically lifts the weighting of the largest issuers, so valuations at the top of the index climb while smaller companies stay at a discount even as their fundamentals improve. All four have reported strong results this year and confirmed or raised their guidance.
The first two are tied to the hardware behind the biggest technology shifts. Mersen is a French company making components for power distribution and power electronics, used in data centres, rail infrastructure and aerospace, and it now expects data centres alone to bring in nearly double last year's revenue. Germany's Elmos Semiconductor supplies the analog and mixed-signal chips behind driver assistance systems, intelligent lighting and sensor platforms, with first-quarter revenue up around a fifth year on year as cars keep getting more electronic 📈
The other two are positioned on structural changes in how goods are made and sold. Finland's Scanfil is a contract manufacturer of electronics for the industrial, energy, medical and aerospace sectors, and stands to benefit as European manufacturers move capacity closer to end markets. France’s Vusion is still seen by many as an electronic shelf label maker, though the business now combines IoT sensors, software, analytics and computer vision into what amounts to a digital operating system for physical stores. Both delivered strong first-half results, with Scanfil lifting revenue by almost a quarter and Vusion by a third, driven by its fast-growing software segment.
"All four companies discussed above operate in different sectors of the economy, but they have one thing in common: each stands to benefit from long-term structural changes. It is precisely these kinds of businesses that often become a source of alpha for investors willing to look beyond the most popular names in the European market," Francesco concludes. 🔍
🔗Read the full analysis in Oninvest
