Exploring Three Undiscovered Gems In The Middle East Market

The Middle East market has recently seen a positive shift, with most Gulf markets experiencing gains due to easing geopolitical tensions following an Iran-Israel ceasefire. As investors regain confidence and return to riskier assets, there is increased interest in identifying promising opportunities within the region's equities landscape. In this context, finding stocks that demonstrate resilience and potential for growth can be particularly rewarding for investors looking to capitalize on the current market sentiment.

Top 10 Undiscovered Gems With Strong Fundamentals In The Middle East

Click here to see the full list of 218 stocks from our Middle Eastern Undiscovered Gems With Strong Fundamentals screener.

We're going to check out a few of the best picks from our screener tool.

RAK Properties PJSC (ADX:RAKPROP)

Simply Wall St Value Rating: ★★★★★★

Overview: RAK Properties PJSC, along with its subsidiaries, focuses on investing in, developing, and managing real estate properties across the United Arab Emirates with a market capitalization of AED3.91 billion.

Operations: RAK Properties PJSC generates revenue primarily from real estate sales, contributing AED1.22 billion, followed by hotel operations at AED206.93 million and property leasing at AED63.54 million. The company's net profit margin is a key metric to consider when evaluating its financial performance.

RAK Properties, a notable player in the Middle Eastern real estate sector, has shown impressive financial resilience. Over five years, its debt to equity ratio improved from 26.9% to 21.3%, indicating prudent financial management. The company reported a robust earnings growth of 54.7% last year, outpacing the industry average of 23.2%. Recent product launches like Solera and Anantara Mina Residences highlight its strategic focus on luxury and lifestyle offerings in prime locations. Despite a significant AED62 million one-off gain affecting recent results, RAK Properties remains profitable with strong free cash flow and satisfactory net debt coverage at 13.2%.

• Get an in-depth perspective on RAK Properties PJSC's performance by reading our health report here.

• Explore historical data to track RAK Properties PJSC's performance over time in our Past section.

Saudi Chemical Holding (SASE:2230)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Saudi Chemical Holding Company engages in the manufacture, wholesale, and retail trade of medicines, medical materials and syrups, pharmaceutical preparations, as well as medical and surgical tools and equipment in Saudi Arabia and internationally, with a market capitalization of SAR5.81 billion.

Operations: The primary revenue stream for Saudi Chemical Holding comes from Medicines and Medical Supplies, generating SAR6.15 billion. Explosives contribute SAR321.18 million, while the Production of Ammonium Nitrate adds SAR80.30 million to the total revenue.

Saudi Chemical Holding, a promising player in the Middle East, showcases strong earnings growth of 16.5% over the past year, outpacing the healthcare industry's 13.6%. Despite a high net debt to equity ratio of 70.4%, its interest payments are well-covered by EBIT at 4.5x coverage, reflecting robust financial management. The company recently announced cash dividends totaling SAR 42 million for FY2024, underscoring shareholder value commitment. However, net income for Q1 decreased to SAR 82 million from SAR 91 million a year ago, with basic earnings per share dipping slightly to SAR 0.1 from SAR 0.11 previously.

• Navigate through the intricacies of Saudi Chemical Holding with our comprehensive health report here.

• Understand Saudi Chemical Holding's track record by examining our Past report.

National Company for Learning and Education (SASE:4291)

Simply Wall St Value Rating: ★★★★☆☆

Overview: National Company for Learning and Education operates kindergarten, primary, middle, and secondary schools across the Kingdom of Saudi Arabia with a market capitalization of SAR 6.42 billion.

Operations: The company generates revenue primarily from its network of schools, with significant contributions from Al-Rayan Schools (SAR 96.96 million), Al Qairwan Schools (SAR 91.19 million), and Ar Rawabi Schools (SAR 90.94 million).

National Company for Learning and Education shows promising growth potential, with its earnings jumping 71.9% over the past year, outpacing the Consumer Services industry average of 6.7%. The company has successfully reduced its debt to equity ratio from 8.2 to 4 over five years, indicating improved financial health. Recent expansions include a SAR 68.7 million land lease in Riyadh for a new educational complex and a SAR 57 million project in Al-Rabie District, both aimed at boosting student capacity and future revenues. With net income rising to SAR 42.62 million this quarter from SAR 34.8 million last year, NCLE is on an upward trajectory.

• Take a closer look at National Company for Learning and Education's potential here in our health report.

• Examine National Company for Learning and Education's past performance report to understand how it has performed in the past.

Summing It All Up

• Get an in-depth perspective on all 218 Middle Eastern Undiscovered Gems With Strong Fundamentals by using our screener here.
• Invested in any of these stocks? Simplify your portfolio management with Simply Wall St and stay ahead with our alerts for any critical updates on your stocks.
• Unlock the power of informed investing with Simply Wall St, your free guide to navigating stock markets worldwide.

Curious About Other Options?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
• Find companies with promising cash flow potential yet trading below their fair value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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