Discovering Undiscovered Gems In November 2024

As global markets react to the recent U.S. election results, optimism surrounds potential economic growth and policy shifts, with small-cap stocks like those in the Russell 2000 Index showing significant gains despite not yet reaching record highs. Amidst this dynamic backdrop, identifying promising small-cap stocks can be a strategic move for investors seeking opportunities that align with current market trends and economic indicators.

Top 10 Undiscovered Gems With Strong Fundamentals

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
PSC	17.90%	2.07%	13.38%	★★★★★★
COSCO SHIPPING International (Hong Kong)	NA	-3.84%	16.33%	★★★★★★
Impellam Group	31.12%	-5.43%	-6.86%	★★★★★★
Ovostar Union	0.01%	10.19%	49.85%	★★★★★★
Sundart Holdings	0.92%	-2.32%	-3.94%	★★★★★★
Citra Tubindo	NA	9.17%	14.32%	★★★★★★
Tianyun International Holdings	10.09%	-5.59%	-9.92%	★★★★★★
Focus Lighting and Fixtures	12.21%	36.42%	77.11%	★★★★★☆
Wilson	64.79%	30.09%	68.29%	★★★★☆☆
A2B Australia	15.83%	-7.78%	25.44%	★★★★☆☆

Click here to see the full list of 4666 stocks from our Undiscovered Gems With Strong Fundamentals screener.

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

Hubei Zhenhua ChemicalLtd (SHSE:603067)

Simply Wall St Value Rating: ★★★★★☆

Overview: Hubei Zhenhua Chemical Co., Ltd. is involved in the research, development, manufacture, and sale of chromium salt and related products in China, with a market cap of CN¥6.71 billion.

Operations: The company generates revenue primarily from the sale of chromium salt products in China. Its financial performance is highlighted by a net profit margin of 10%, reflecting its ability to convert sales into profit efficiently.

Hubei Zhenhua Chemical, a relatively small player in the chemicals industry, has demonstrated solid financial performance. The company reported sales of CNY 2.99 billion for the first nine months of 2024, up from CNY 2.75 billion a year earlier, while net income rose to CNY 363.87 million from CNY 288.85 million. Its earnings per share increased to CNY 0.72 from CNY 0.57 in the same period last year, reflecting robust growth despite broader industry challenges with a -5% decline in sector earnings last year compared to its own growth of 15%. With a P/E ratio of 15x below the market average and recent buybacks totaling over four million shares for about CNY 46 million, Zhenhua seems committed to enhancing shareholder value amidst favorable conditions for future profit expansion projected at about nearly thirteen percent annually.

• Take a closer look at Hubei Zhenhua ChemicalLtd's potential here in our health report.

• Gain insights into Hubei Zhenhua ChemicalLtd's historical performance by reviewing our past performance report.

Hunan Development Group (SZSE:000722)

Simply Wall St Value Rating: ★★★★★★

Overview: Hunan Development Group Co., Ltd. focuses on the development and operation of hydroelectric power generation in China, with a market cap of CN¥5.01 billion.

Operations: The company generates revenue primarily from hydroelectric power generation. It has a market cap of CN¥5.01 billion, reflecting its scale in the energy sector.

Hunan Development Group, a nimble player in its sector, has shown remarkable earnings growth of 163% over the past year, outpacing the renewable energy industry's 7%. This progress is underscored by their debt-free status, a stark contrast to five years ago when they had a debt-to-equity ratio of 4.4. Despite this growth spurt, their earnings have slipped by an average of 21% annually over the last five years. Recent financials reveal net income climbing to CNY 61 million for nine months ending September 2024 from CNY 45 million previously, with basic EPS rising from CNY 0.1 to CNY 0.13.

• Get an in-depth perspective on Hunan Development Group's performance by reading our health report here.

• Examine Hunan Development Group's past performance report to understand how it has performed in the past.

Lungyen Life Service (TPEX:5530)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Lungyen Life Service Corporation operates in Taiwan, offering funeral facilities and services, with a market capitalization of NT$20.52 billion.

Operations: Lungyen Life Service Corporation generates revenue primarily from life ritual services (NT$1.98 billion), the sale of tower tombs (NT$1.56 billion), property leasing (NT$0.16 billion), and its cemetery business (NT$0.32 billion). The company focuses on these diverse revenue streams to support its financial structure, with a significant portion derived from life ritual services and tower tomb sales.

Lungyen Life Service, a smaller player in its field, has shown a mixed financial landscape recently. Despite a revenue dip of 4.09% to TWD 2.87 billion for the year up to September 2024 compared to last year, the company boasts strong earnings growth of 51.6% over the past year, outpacing industry averages. Its debt management appears robust with a reduction in debt-to-equity from 24.4% to just 3.4% over five years and more cash than total debt on hand, indicating solid financial health despite negative free cash flow figures lately impacting liquidity dynamics.

• Navigate through the intricacies of Lungyen Life Service with our comprehensive health report here.

• Gain insights into Lungyen Life Service's past trends and performance with our Past report.

Summing It All Up

• Get an in-depth perspective on all 4666 Undiscovered Gems With Strong Fundamentals by using our screener here.
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Contemplating Other Strategies?

• 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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