Discovering Europe's Undiscovered Gems This March 2025

As Europe navigates the complexities of U.S. trade tariffs and monetary policy uncertainties, the pan-European STOXX Europe 600 Index recently ended 1.23% lower, reflecting broader market caution. In this environment, identifying promising small-cap stocks requires careful consideration of companies with resilient business models and growth potential that can withstand economic fluctuations and geopolitical challenges.

Top 10 Undiscovered Gems With Strong Fundamentals In Europe

Click here to see the full list of 362 stocks from our European Undiscovered Gems With Strong Fundamentals screener.

Here's a peek at a few of the choices from the screener.

ChemoMetec (CPSE:CHEMM)

Simply Wall St Value Rating: ★★★★★★

Overview: ChemoMetec A/S specializes in developing, producing, and selling analytical equipment for cell counting and analysis across the United States, Canada, Europe, and internationally with a market cap of DKK9.48 billion.

Operations: Revenue primarily stems from consumables at DKK208.76 million, followed by instruments at DKK142.83 million, and services contributing DKK103.43 million.

ChemoMetec, a promising player in the life sciences sector, reported impressive earnings growth of 17.6% last year, surpassing the industry average of 16.5%. The company has reduced its debt to equity ratio from 0.4% to 0.2% over five years and boasts high-quality earnings, indicating financial health and operational efficiency. Recent half-year results showed sales jumping to DKK 251 million from DKK 199 million a year ago, with net income rising to DKK 103 million from DKK 71 million. Looking ahead, ChemoMetec anticipates revenue between DKK 470-490 million for the current financial year, reflecting strong growth prospects.

• Delve into the full analysis health report here for a deeper understanding of ChemoMetec.

• Evaluate ChemoMetec's historical performance by accessing our past performance report.

engcon (OM:ENGCON B)

Simply Wall St Value Rating: ★★★★★★

Overview: engcon AB (publ) specializes in designing, producing, and selling excavator tools across multiple regions including Europe, the Americas, Asia-Pacific, and other international markets with a market cap of SEK15.12 billion.

Operations: The primary revenue stream for engcon AB comes from its Construction Machinery & Equipment segment, generating SEK 1.65 billion. The company's financial performance is characterized by a focus on this segment across various international markets.

Engcon, a player in the machinery sector, has seen its debt to equity ratio significantly improve from 15.3% to 4.5% over five years, indicating better financial health. Despite high-quality earnings and positive free cash flow, last year's earnings dipped by 21.5%, contrasting with the industry average of 1.2%. The company’s interest payments are comfortably covered by EBIT at a multiple of 14.9x, which is robust compared to typical benchmarks. Engcon's strategic expansion into Asia and the Americas could bolster revenue growth; however, risks remain due to its heavy reliance on European markets and potential U.S.-related tariffs impacting operations.

• Engcon's strategic expansion into Asia and the Americas is poised to drive significant revenue growth. Click here to explore the full narrative on Engcon's market expansion and innovation strategies.

Huber+Suhner (SWX:HUBN)

Simply Wall St Value Rating: ★★★★★★

Overview: Huber+Suhner AG specializes in providing products and services for electrical and optical connectivity, with a market capitalization of CHF1.45 billion.

Operations: The company's revenue is primarily derived from three segments: Communication (CHF353.57 million), Industry (CHF276.66 million), and Transportation (CHF263.65 million).

Huber+Suhner, a nimble player in the tech space, is showcasing solid growth prospects with its focus on optical switches and fiber technology. The company has reported earnings growth of 11.2% over the past year, outpacing the electrical industry’s 2.6%. With no debt on its books compared to a debt-to-equity ratio of 0.2% five years ago, it stands financially robust. Trading at 28.6% below estimated fair value suggests potential upside for investors eyeing value opportunities in this sector. However, economic uncertainties and project dependencies could pose challenges to achieving projected revenue growth of 10.4% annually over three years.

• Huber+Suhner's innovations in optical switches and fiber technology drive potential growth. Click here to explore the full narrative on Huber+Suhner's strategic positioning and market outlook.

Make It Happen

• Explore the 362 names from our European Undiscovered Gems With Strong Fundamentals screener here.
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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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