Stock Analysis

Discovering France's Undiscovered Gems for August 2024

As the European economy experiences a boost from Paris, France's CAC 40 Index has gained momentum, reflecting broader optimism fueled by anticipated interest rate cuts from both the Federal Reserve and the European Central Bank. Amid this positive backdrop, small-cap stocks have shown notable resilience and potential for growth. In this environment, identifying promising stocks often involves looking beyond well-known names to uncover hidden gems that can thrive in favorable economic conditions.

Top 10 Undiscovered Gems With Strong Fundamentals In France

NameDebt To EquityRevenue GrowthEarnings GrowthHealth Rating
Caisse Régionale de Crédit Agricole Mutuel Brie Picardie Société coopérative34.89%3.23%3.61%★★★★★★
Gévelot0.25%10.64%20.33%★★★★★★
EssoF1.19%11.14%41.41%★★★★★★
VIEL & Cie société anonyme63.16%5.00%16.26%★★★★★☆
Exacompta Clairefontaine30.44%6.92%31.73%★★★★★☆
ADLPartner86.83%9.59%11.00%★★★★★☆
La Forestière Equatoriale0.00%-50.76%49.41%★★★★★☆
Caisse Régionale de Crédit Agricole Mutuel Alpes Provence Société coopérative391.01%4.67%17.31%★★★★☆☆
Société Fermière du Casino Municipal de Cannes11.60%6.69%10.30%★★★★☆☆
Société Industrielle et Financière de l'Artois Société anonyme2.93%-1.09%8.31%★★★★☆☆

Click here to see the full list of 36 stocks from our Euronext Paris Undiscovered Gems With Strong Fundamentals screener.

Let's review some notable picks from our screened stocks.

Axway Software (ENXTPA:AXW)

Simply Wall St Value Rating: ★★★★★☆

Overview: Axway Software SA is an infrastructure software publisher with operations in France, the rest of Europe, the Americas, and the Asia Pacific, and has a market cap of €665.16 million.

Operations: Axway Software SA generates revenue from four primary segments: License (€8.46 million), Maintenance (€77.04 million), Subscription (€201.19 million), and Services excluding Subscription (€35.49 million). The company has a market cap of €665.16 million.

Axway Software has recently completed a €130.61 million follow-on equity offering, with Société Générale and Crédit Agricole Cib as co-lead underwriters. The company reported half-year revenue of €148.7 million, up from €145.5 million last year, though net income dipped to €2.8 million from €3.7 million. With a price-to-earnings ratio of 19x below the industry average, its net debt to equity ratio stands at a satisfactory 19.9%. While shareholders experienced dilution this past year, Axway's interest payments are well covered by EBIT (10.1x).

ENXTPA:AXW Earnings and Revenue Growth as at Aug 2024

CFM Indosuez Wealth Management (ENXTPA:MLCFM)

Simply Wall St Value Rating: ★★★★★☆

Overview: CFM Indosuez Wealth Management SA, along with its subsidiaries, offers banking and financial solutions to private investors, businesses, institutions, and professionals in Monaco and internationally with a market cap of €630.30 million.

Operations: CFM Indosuez Wealth Management generates revenue primarily from its Wealth Management segment, amounting to €196.38 million. The company's market cap stands at €630.30 million.

CFM Indosuez Wealth Management, with total assets of €7.7B and equity of €404.3M, showcases solid fundamentals. Total deposits stand at €6.2B while loans amount to €3.2B, indicating a robust lending portfolio. The company's earnings growth of 40% over the past year outpaced the banking industry's -11%. With a price-to-earnings ratio of 10x compared to the French market's 15x, it appears undervalued. Moreover, its bad loans are low at 0.8%, supported by an allowance for bad loans at 34%.

ENXTPA:MLCFM Debt to Equity as at Aug 2024

Neurones (ENXTPA:NRO)

Simply Wall St Value Rating: ★★★★★☆

Overview: Neurones S.A. is an IT services company that offers infrastructure, application, and consulting services in France and internationally, with a market cap of approximately €1.09 billion.

Operations: Neurones generates revenue primarily from Infrastructure Services (€468.49 million), Application Services (€219.47 million), and Consulting (€53.21 million).

Neurones, a small French IT services firm, has seen its debt to equity ratio rise from 0.1% to 1.8% over five years but remains financially sound with more cash than total debt. The company’s earnings grew by 11.7% in the past year, outpacing the broader IT industry’s -9.9%. Trading at 11.1% below estimated fair value and boasting high-quality earnings, Neurones appears well-positioned for continued growth in a competitive market.

ENXTPA:NRO Debt to Equity as at Aug 2024

Key Takeaways

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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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