German banks are real money makers but the fact that in the international market their valuation is quite low which makes them an attractive stock for investors looking to invest in a bank. What makes these banks so special is their ability to make money yet trade at a 50 percent cut price and investors can’t wish for more. Deutsche Bank AG (NYSE:DB) and Commerzbank AG (NASDAQOTH:CRZBY) are well known banks in Germany but the valuation of these two banks is lower than usual American banks. Fixed investment banks are reducing largely because they aren’t profitable but Deutsche Bank AG (NYSE:DB) and Commerzbank AG (NASDAQOTH:CRZBY) banks have been going strong, which is an anomaly.
The underestimation of German banks is their strongest point. The low valuation attracts investors because the stock is cheaper and convenient to buy. And it won’t hurt much even if it plunges. American banks are bigger and therefore the risk with them is bigger too. If you opt for an American bank and it doesn’t come through, you as an investor will more have to lose than the bank. That isn’t the case with German banks. The best thing about the German banks is that their undervaluation isn’t evidence of their underperformance. It’s just that their exposition is low, in modern terms; it’s not in the mainstream.
Deutsche Bank AG (NYSE:DB) bank is offering discounts because it believes that it owes its investors certain compensation. Deutsche Bank AG (NYSE:DB) bank had assured its investors that money will be raised only through orthodox and conventional means but at the end the bank put 8 million euro shares on sale in a fit of desperation. That wasn’t a good sign for investors but Deutsche Bank AG (NYSE:DB) bank realizes its mistake and now is willing to offer 50 percent cut price to the investors, for a definite period of time.
Commerzbank AG (NASDAQOTH:CRZBY) is offering discounts because it is much smaller than Deutsche Bank AG (NYSE:DB) and is unnoticeable in the international market. The investors aren’t aware of it and even if they are, they don’t pay much attention. Other than that, Commerzbank AG (NASDAQOTH:CRZBY) doesn’t pay dividends to its investors. So the bank has really no choice but to offer discounts to the investors. Otherwise the bank will stay in oblivion.
So why these two banks are a good buy at the stock market? Because it’s safe to invest your money in them, and even if you don’t get a return, you won’t experience a loss. It’s something you can invest in and forget that money and at some point you’ll be rewarded because banks always make people happy, be it small banks or high end banks. Commerzbank AG (NASDAQOTH:CRZBY) and Deutsche Bank AG (NYSE:DB) are the type of banks one needs to invest in, if the investor considers himself safe. But if the investor isn’t safe, these two banks can pose a risk which might be hard to fathom.
In any case, it’s a smart buy and if you are an investor with safe finances, you should invest in these two German banks.