Undiscovered Gems in the United Kingdom for October 2024

The United Kingdom's market landscape has recently been influenced by global economic uncertainties, with the FTSE 100 index experiencing declines due to weak trade data from China and its subsequent impact on commodity-linked stocks. Amidst these broader market challenges, identifying promising small-cap stocks requires a focus on companies with robust fundamentals and resilience to external economic pressures.

Top 10 Undiscovered Gems With Strong Fundamentals In The United Kingdom

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
B.P. Marsh & Partners	NA	29.42%	31.34%	★★★★★★
Andrews Sykes Group	NA	2.15%	4.93%	★★★★★★
M&G Credit Income Investment Trust	NA	17.28%	15.80%	★★★★★★
London Security	0.22%	10.13%	7.75%	★★★★★★
Globaltrans Investment	8.54%	5.28%	22.11%	★★★★★★
Impellam Group	31.12%	-5.43%	-6.86%	★★★★★★
Kodal Minerals	NA	nan	72.74%	★★★★★★
VH Global Sustainable Energy Opportunities	NA	18.30%	20.03%	★★★★★★
BBGI Global Infrastructure	0.02%	3.08%	6.85%	★★★★★☆
Goodwin	52.21%	9.26%	13.12%	★★★★★☆

Click here to see the full list of 82 stocks from our UK Undiscovered Gems With Strong Fundamentals screener.

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

Cohort (AIM:CHRT)

Simply Wall St Value Rating: ★★★★★★

Overview: Cohort plc is a company that offers a range of products and services in defense, security, and related markets across multiple regions including the United Kingdom, Germany, Portugal, Africa, the Americas, the Asia Pacific region, and other European countries with a market capitalization of £353.47 million.

Operations: Cohort plc generates revenue primarily from its Sensors and Effectors segment (£120.49 million) and Communications and Intelligence segment (£83.38 million).

Cohort, a notable player in the Aerospace & Defense sector, has demonstrated robust earnings growth of 34.9% over the past year, outpacing industry averages. The company's debt to equity ratio has improved from 32.5% to 29.2% over five years, reflecting prudent financial management. With interest payments well covered by EBIT at 17.5 times and high-quality earnings reported, Cohort seems financially sound with more cash than total debt on its books. Recent leadership changes include Peter Lynas taking over key roles on the board following Jeff Perrin's retirement after significant contributions to the company’s governance and strategy development.

• Take a closer look at Cohort's potential here in our health report.

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

RHI Magnesita (LSE:RHIM)

Simply Wall St Value Rating: ★★★★★☆

Overview: RHI Magnesita N.V., along with its subsidiaries, focuses on the development, production, sale, installation, and maintenance of refractory products and systems for industrial high-temperature processes globally, with a market cap of £1.51 billion.

Operations: RHI Magnesita generates revenue primarily from its Steel segment, contributing €2.44 billion. The company has a net profit margin trend that is noteworthy for analysis in understanding its financial performance.

RHI Magnesita, a dynamic player in the UK market, has demonstrated impressive earnings growth of 33.2% over the past year, outpacing the Basic Materials industry significantly. Trading at 60.9% below its estimated fair value suggests potential for investors seeking undervalued opportunities. Despite a high net debt to equity ratio of 85.8%, interest payments are well covered by EBIT at 6.3 times coverage, indicating manageable financial obligations. The company is free cash flow positive and forecasts suggest earnings will grow around 12.71% annually, painting an optimistic picture for future profitability and stability in its sector.

• Navigate through the intricacies of RHI Magnesita with our comprehensive health report here.

• Learn about RHI Magnesita's historical performance.

Raspberry Pi Holdings (LSE:RPI)

Simply Wall St Value Rating: ★★★★★★

Overview: Raspberry Pi Holdings plc designs and develops single-board computers and compute modules globally, with a market capitalization of £696.68 million.

Operations: Raspberry Pi Holdings generates revenue primarily from its computer hardware segment, amounting to $320.50 million.

Raspberry Pi Holdings, a nimble player in the tech scene, recently joined the FTSE 250 Index, marking a significant milestone. Its earnings grew by 26% over the past year, outpacing the tech industry average of 25%. Despite being debt-free for five years, it faces challenges with negative free cash flow reaching US$42.31 million as of October 2024. The launch of Raspberry Pi Pico 2 aims to boost sales across various markets. While its net income dipped slightly to US$7.6 million from US$8.5 million last year, this innovative company continues to capture attention with strategic product enhancements and robust growth prospects.

• Click to explore a detailed breakdown of our findings in Raspberry Pi Holdings' health report.

• Assess Raspberry Pi Holdings' past performance with our detailed historical performance reports.

Turning Ideas Into Actions

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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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