Spotlight On October 2024's Undiscovered Gems With Strong Potential

As rising Treasury yields weigh on U.S. stocks, small-cap equities have faced particular pressure, with the S&P 600 underperforming its large-cap counterparts amid a backdrop of tepid economic growth and cautious market sentiment. In such an environment, identifying undiscovered gems requires a keen eye for companies with robust fundamentals and resilience to broader macroeconomic challenges.

Top 10 Undiscovered Gems With Strong Fundamentals

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Etihad Atheeb Telecommunication	NA	26.82%	62.18%	★★★★★★
Impellam Group	31.12%	-5.43%	-6.86%	★★★★★★
Ovostar Union	0.01%	10.19%	49.85%	★★★★★★
Tianyun International Holdings	10.09%	-5.59%	-9.92%	★★★★★★
MAPFRE Middlesea	NA	14.56%	1.77%	★★★★★☆
First National Bank of Botswana	24.77%	10.64%	15.30%	★★★★★☆
ZHEJIANG DIBAY ELECTRICLtd	24.08%	7.75%	1.96%	★★★★★☆
A2B Australia	15.83%	-7.78%	25.44%	★★★★☆☆
Wilson	64.79%	30.09%	68.29%	★★★★☆☆
Zahrat Al Waha For Trading	80.05%	4.97%	-15.99%	★★★★☆☆

Click here to see the full list of 4735 stocks from our Undiscovered Gems With Strong Fundamentals screener.

Let's uncover some gems from our specialized screener.

Shenzhen Kingdom Sci-Tech (SHSE:600446)

Simply Wall St Value Rating: ★★★★★★

Overview: Shenzhen Kingdom Sci-Tech Co., Ltd, with a market cap of CN¥13.27 billion, offers Fintech services in China.

Operations: The company generates revenue primarily from its IT Equipment Distribution Business, contributing CN¥2.79 billion, and Customized Service Business at CN¥1.01 billion. The Banking Software Business also plays a significant role with revenues of CN¥513.07 million.

Shenzhen Kingdom Sci-Tech, a smaller player in the tech space, shows mixed signals. Over the past year, earnings grew by 23.4%, outpacing the software industry’s -13.8%. The company has reduced its debt to equity ratio from 46.2% to 24.5% over five years and trades at 48.2% below estimated fair value, suggesting potential undervaluation. However, recent results reveal challenges with a net loss of CNY 115 million for nine months ending September 2024 compared to a profit last year and basic loss per share at CNY 0.1221 from previously positive figures, indicating areas needing attention despite strategic buybacks of over two million shares recently completed for CNY 20 million.

• Dive into the specifics of Shenzhen Kingdom Sci-Tech here with our thorough health report.

• Gain insights into Shenzhen Kingdom Sci-Tech's past trends and performance with our Past report.

Shanghai Chlor-Alkali Chemical (SHSE:600618)

Simply Wall St Value Rating: ★★★★★☆

Overview: Shanghai Chlor-Alkali Chemical Co., Ltd. is engaged in the manufacturing and sale of chemical products both domestically and internationally, with a market capitalization of CN¥8.30 billion.

Operations: Shanghai Chlor-Alkali Chemical generates revenue from the manufacturing and sale of chemical products. The company has a market capitalization of CN¥8.30 billion.

Shanghai Chlor-Alkali Chemical, a company with a market presence in the chemicals sector, has been making waves with its recent performance. Over the past year, earnings grew by 36%, outpacing the industry average of -4.6%. The company's financial health appears solid; it holds more cash than its total debt and maintains an attractive price-to-earnings ratio of 11.7x compared to the broader CN market's 34x. Recent figures show sales reaching ¥6 billion for nine months ending September 2024, up from ¥5.27 billion last year, while net income rose to ¥606 million from ¥446 million previously.

• Take a closer look at Shanghai Chlor-Alkali Chemical's potential here in our health report.

• Examine Shanghai Chlor-Alkali Chemical's past performance report to understand how it has performed in the past.

Chongqing Mas Sci.&Tech.Co.Ltd (SZSE:300275)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Chongqing Mas Sci.&Tech.Co.,Ltd. offers safety technology equipment and safety information services in China, with a market cap of CN¥4.29 billion.

Operations: The company generates revenue primarily from its safety technology equipment and safety information services. The net profit margin has shown variability, reflecting changes in operational efficiency and cost management.

Chongqing Mas Sci.&Tech.Co.Ltd. has demonstrated notable financial performance with sales reaching CNY 351.93 million for the first nine months of 2024, up from CNY 295.73 million the previous year, while net income rose to CNY 46.3 million from CNY 35.42 million. The company also completed a share buyback program, repurchasing a total of 2,680,900 shares for CNY 25.5 million since February 2024, reflecting strategic capital management efforts in a volatile market environment where its stock price has been highly unstable over the past three months but remains profitable with satisfactory debt levels and high-quality earnings growth at an impressive pace compared to industry standards.

• Get an in-depth perspective on Chongqing Mas Sci.&Tech.Co.Ltd's performance by reading our health report here.

• Explore historical data to track Chongqing Mas Sci.&Tech.Co.Ltd's performance over time in our Past section.

Next Steps

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Interested In Other Possibilities?

• 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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