Stock bargain-hunters out in these early days of January seem to have spotted value in Dublin – home to Europe’s second-worst performing market index last year, after Greece.

With almost €21 billion knocked off the value of Irish shares in 2018, in a 22 per cent slump by the Iseq, stockbrokers have been out in force in the first eight days of trading this year, hawking “hidden value” across a beaten-down market.

They are not alone. The start of a new year offers a unique opportunity for brokerages and investment banks to drum up fresh business.

And after a dire December across international markets – with Wall Street’s Dow Jones Industrial Average and S&P 500 indices suffering their biggest end-of-year slumps since 1931 – investors seem to be prepared, for the moment at least, to look beyond a long list of concerns including slowing global growth, a shock sales warning from tech giant Apple last week, threats to trade and, of course, Brexit.

While the Iseq pulled back on Friday, it remains 4.2 per cent ahead so far this year, helped by some upbeat trading statements from companies including housebuilder Glenveagh Properties and cider and beer maker C&C, as well as Grafton Group, the Dublin-based, but London-listed builders merchants and DIY company.

A perusal of price targets that analysts have placed on stocks suggests that Glenveagh Properties is the most underappreciated company on the Iseq 20 index. The average price target stands at €1.47, pointing about 80 per cent upside from current levels.

The housebuilder’s shares slumped about 40 per cent last year amid a badly-received equity raise by the company and a move by US private equity giant Oaktree (which put the group together in the first place and steered it on to the stock market in 2017) to flog half its interest.

The stock at rival Cairn Homes was also marked down last year in tandem with UK peers, which have been hit by Brexit concerns.

Stockbrokers Davy told clients on Friday that Glenveagh has been added to the firm’s “conviction list”, saying its current trading levels would imply that land values are set to fall by up to 20 per cent and house prices by as much as 10 per cent. “We view this as a mispricing of risk,” it said.

Cairn Homes offers the second highest upside on the Iseq 20, at over 60 per cent, if you put your faith in analysts’ targets.

Favourite stocks

Irish banking stocks – which were hammered last year as followers of the sector across Europe worried about slowing growth, the prospect of European Central Bank rate hikes being pushed out to 2020, and rise in populist politics – are also deeply undervalued, according to analysts.

Only the bravest of souls would fully buy into the bullish stock predictions

The average share price target for Bank of Ireland would suggest that investors buying now would stand to make a 54 per cent gain over the next 12 months. AIB’s stock has 35 per cent upside, according to brokers’ projections.

But while Daragh Quinn, an analyst with Keefe, Bruyette & Woods in London, said in a report during the week that Irish banking stocks look cheap, he warned that the sector is likely to remain volatile as the outcome of Brexit becomes clearer.

“Whilst economic growth in Ireland remains strong, the uncertainty around Brexit is undoubtedly having an impact on corporate and SME (small to medium-sized enterprises) demand for loans,” he said. “As a result, and despite the improvement in mortgage demand, overall loan growth remains relatively anaemic.”

Ferries operator Irish Continental Group (ICG), which lost more than a fifth of its value last year, is the fourth most underrated stock on the Iseq in analysts’ views.

Goodbody Stockbrokers analyst Patrick O’Donnell has been pushing the stock, saying ICG is well placed as a result of its investment in new fleet (it took delivery of the new €147 million WB Yeats cruise ferry last month), a slump in fuel costs late last year, and continued growth in the Irish-UK freight market, in spite of Brexit uncertainty.

Smurfit Kappa, which saw its stock slide as much as 40 per cent from its highs last year as the cardboard box-maker fended off an unwanted takeover approach and the wider sector succumbed to fears of overcapacity in a slowing economy, is another top pick among analysts. The average share price target stands at 40 per cent above Smurfit’s current trading level.

Fresh produce provider Total Produce, building materials giant CRH, Dalata Hotel Group, and agri-services company Origin Enterprises round off the list of analysts’ favourite 10 stocks. These have scope, according to average price targets, to gain between 29 per cent and 33 per cent from current trading levels.

Still, only the bravest of souls would fully buy into the bullish stock predictions.

While global investors have taken some comfort this week from comments by US Federal Reserve chairman Jerome Powell that the world’s most influential central bank will be “patient” before adjusting interest rates as it monitors the economy, economists surveyed by the Wall Street Journal this week see the chances of a US recession in the next 12 months at 25 per cent, the highest in over seven years.

Closer to home, data published in recent days indicated that Germany, the euro zone’s largest economy, and Italy, the third largest, are flirting with technical downturns.

Meanwhile, the National Treasury Management Agency (NTMA), in an investor presentation published on Wednesday, said Ireland was highly geared towards the US economy. A hard Brexit – which it considers a “distinct possibility” – could knock as much as 7 per cent off Irish growth over five years.

Best, perhaps, to stay buckled up.