Knorr-Bremse Stock: Glad I Sold Some Before The Dip, Looking At 2025

2025-04-14 15:26:22 ET

Summary

• Knorr-Bremse AG, a leading braking system manufacturer, has strong fundamentals, an A-rated balance sheet, and a well-covered dividend, making it a solid investment.
• I sold 30% of my stake due to macroeconomic concerns but plan to reinvest, as the company's future outlook remains positive with significant earnings potential.
• The company's efficiency improvements, high demand in rail segments, and strategic sales and acquisitions support a price target increase to €103/share.
• Despite some forecast uncertainties, KNRRY stock's historical P/E average and strong order book justify a "Buy" rating with an expected annualized RoR of 20%+.

Dear readers/followers,

This article is going to be about an update for Knorr-Bremse AG (KNRRY) , a braking system company that I have been reviewing and investing in for about a year. I will make the case that if you use the tenets of valuation that I preach, there was a time when you could get out and make an excellent RoR not that long ago. That being said, I only sold 30% of my stake at the time. Because while the company's price was impressive, it was not at the level that's typically enough for me.

So why did I sell?

I did a number of sales and rotations at the time in January/February that had to do with getting out of cyclical industrial or dollar-denominated stocks. My general view was that President Trump's policies were initially not going to be good for the global economy and/or for the USD. Remember that I invest in base currency SEK, which in January had an exchange rate of 11.05. Now, we're in April, and the dollar has weakened to under 9.9. This is drop in a historically short period of time, and my sales were as such, excellently timed. With the money I earned, I bought shares in EUR-denominated companies, as well as NOK, SEK, DKK, GBP, and YPN....

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