Exploring Undiscovered French Stocks July 2024

Amid a backdrop of shifting market dynamics in Europe, where the CAC 40 Index recently saw a decline of 2.46%, investors are increasingly turning their attention to smaller-cap stocks that may offer unique growth opportunities. This strategic pivot aligns with broader trends observed in global markets, emphasizing the potential resilience and agility of undiscovered French stocks during turbulent times. In this context, understanding the intrinsic qualities that define promising small-cap companies—such as innovative business models or strong niche market positions—becomes crucial for those looking to explore investment avenues less trodden in France's vibrant market landscape.

Top 10 Undiscovered Gems With Strong Fundamentals In France

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Caisse Régionale de Crédit Agricole Mutuel Brie Picardie Société coopérative	34.89%	3.23%	3.61%	★★★★★★
Gévelot	0.25%	10.64%	20.33%	★★★★★★
Société des Chemins de Fer et Tramways du Var et du Gard	NA	nan	-2.95%	★★★★★★
VIEL & Cie société anonyme	63.16%	5.00%	16.26%	★★★★★☆
ADLPartner	86.83%	9.59%	11.00%	★★★★★☆
Exacompta Clairefontaine	30.44%	6.92%	31.73%	★★★★★☆
La Forestière Equatoriale	0.00%	-50.76%	49.41%	★★★★★☆
Fiducial Real Estate	33.77%	1.63%	3.30%	★★★★☆☆
Société Fermière du Casino Municipal de Cannes	11.60%	6.69%	10.30%	★★★★☆☆
Société Industrielle et Financière de l'Artois Société anonyme	2.93%	-1.09%	8.31%	★★★★☆☆

Click here to see the full list of 33 stocks from our Euronext Paris Undiscovered Gems With Strong Fundamentals screener.

Below we spotlight a couple of our favorites from our exclusive screener.

Sidetrade (ENXTPA:ALBFR)

Simply Wall St Value Rating: ★★★★★☆

Overview: Sidetrade SA offers an AI-driven order-to-cash software platform to clients globally, with a market capitalization of €248.62 million.

Operations: Sidetrade generates its revenue primarily from software and programming, achieving a net income of €5.63 million on revenues of €43.96 million as of the latest reporting date. The company has seen a notable increase in gross profit margin to 4.86% over recent periods, reflecting improved operational efficiency despite fluctuations in operating expenses and non-operating costs.

Sidetrade, a French tech firm, stands out with its robust performance in the software industry, boasting a 66.7% earnings growth over the past year—far surpassing the industry average of 11.2%. This growth trajectory is supported by strong fundamentals including a high-quality earnings profile and an impressive EBIT coverage ratio of 73.8 times interest payments. Recently, Sidetrade enhanced its market position by appointing Allison Barlaz as Chief Marketing Officer and launching 'Ask Aimie,' a generative AI feature aimed at revolutionizing user experience in financial communication. These strategic moves are likely to bolster Sidetrade’s expansion, particularly in North America, aligning with its revenue surge to €24.8 million in the first half of 2024 from €20.9 million the previous year.

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

• Learn about Sidetrade's historical performance.

Société Fermière du Casino Municipal de Cannes (ENXTPA:FCMC)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Société Fermière du Casino Municipal de Cannes is a French company engaged in operating casinos and hotels, with a market capitalization of €231.77 million.

Operations: The company generates a significant portion of its revenue from the hotel business, contributing €127.84 million, with additional earnings from casino operations amounting to €17.25 million. It incurs costs primarily in the form of cost of goods sold (COGS) and operating expenses, which include substantial depreciation and amortization charges.

Société Fermière du Casino Municipal de Cannes (FCMC) showcases a compelling narrative as an undervalued gem, with its earnings surging by 58% over the past year, significantly outpacing the hospitality industry's growth. Trading at 21.5% below its estimated fair value, FCMC combines financial prudence and strategic prowess; it holds more cash than debt and has seen a debt to equity ratio climb from 0.3% to 11.6%. Recent half-year results revealed a notable reduction in net loss to EUR 3.34 million from EUR 14.75 million year-on-year, underscoring an improving operational efficiency despite challenging market conditions.

• Take a closer look at Société Fermière du Casino Municipal de Cannes' potential here in our health report.

• Assess Société Fermière du Casino Municipal de Cannes' past performance with our detailed historical performance reports.

Gérard Perrier Industrie (ENXTPA:PERR)

Simply Wall St Value Rating: ★★★★★★

Overview: Gérard Perrier Industrie S.A. specializes in the design, manufacture, installation, and maintenance of electrical, electronic, automation, and instrumentation equipment for various industries both in France and internationally. The company has a market capitalization of €360.48 million.

Operations: The company generates revenue through diverse sectors including energy, aeronautics, installation maintenance, and specialized manufacturing. Key revenue contributors are the Branch Installation Maintenance (€96.87 million) and Branch Manufacturing and Specializations (€91.65 million), supported by steady gross profit margins around 72% as of the latest reporting period in 2023.

Gérard Perrier Industrie, a notable player in the French electrical sector, reported a robust financial performance with annual sales rising to €304 million from €279 million. The firm's net income also saw an increase to €19.6 million, up from €16.7 million last year. With a price-to-earnings ratio of 18.4x, it stands below the industry average of 21.3x, suggesting potential undervaluation. Additionally, its debt-to-equity ratio improved slightly over five years from 22% to 21%, while maintaining positive free cash flow and high-quality earnings growth forecast at about 3.7% annually.

• Click to explore a detailed breakdown of our findings in Gérard Perrier Industrie's health report.

• Review our historical performance report to gain insights into Gérard Perrier Industrie's's past performance.

Make It Happen

• Navigate through the entire inventory of 33 Euronext Paris Undiscovered Gems With Strong Fundamentals here.
• Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St's portfolio to get a 360-degree view on how they're shaping up.
• Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com