Hidden Opportunities in Undiscovered Gems This December 2024

As the year draws to a close, global markets have experienced mixed performances, with major U.S. stock indexes posting moderate gains despite declining consumer confidence and manufacturing indicators. In this climate of fluctuating economic signals, small-cap stocks present unique opportunities for investors seeking hidden gems that may offer growth potential amid broader market uncertainties. Identifying these promising stocks involves looking for companies with strong fundamentals and innovative strategies that can thrive even when larger economic trends are in flux.

Top 10 Undiscovered Gems With Strong Fundamentals

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Canal Shipping Agencies	NA	8.92%	22.01%	★★★★★★
Suez Canal Company for Technology Settling (S.A.E)	NA	22.31%	13.60%	★★★★★★
Philippine Savings Bank	NA	5.49%	20.73%	★★★★★★
Ovostar Union	0.01%	10.19%	49.85%	★★★★★★
Formula Systems (1985)	37.70%	9.99%	13.08%	★★★★★★
Aesler Grup Internasional	NA	-17.61%	-40.21%	★★★★★★
Likhami Consulting	NA	1.68%	-12.74%	★★★★★★
Tianyun International Holdings	10.09%	-5.59%	-9.92%	★★★★★★
Y.D. More Investments	69.32%	30.27%	27.89%	★★★★★☆
A2B Australia	15.83%	-7.78%	25.44%	★★★★☆☆

Click here to see the full list of 4628 stocks from our Undiscovered Gems With Strong Fundamentals screener.

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

Deva Holding (IBSE:DEVA)

Simply Wall St Value Rating: ★★★★★☆

Overview: Deva Holding A.S. is a Turkish company that manufactures, markets, and sells pharmaceutical products with a market capitalization of TRY15.41 billion.

Operations: Deva Holding's primary revenue stream is from its Human Pharma segment, generating TRY10.50 billion, with additional contributions from Veterinary Products at TRY429.85 million.

Deva Holding, a notable player in the pharmaceuticals sector, has seen its earnings soar by 860% over the past year, outpacing industry growth of 7%. Despite this impressive performance, the company faces challenges with interest payments not well covered by EBIT at just 1.1x. Its net debt to equity ratio sits comfortably at 17.5%, having improved from 81% five years ago. However, recent financials show a TRY 267 million net loss for Q3 compared to TRY 575 million last year. The price-to-earnings ratio stands attractively low at just five times against the market's average of nearly sixteen times.

• Dive into the specifics of Deva Holding here with our thorough health report.

• Understand Deva Holding's track record by examining our Past report.

Tomson Group (SEHK:258)

Simply Wall St Value Rating: ★★★★★☆

Overview: Tomson Group Limited is an investment holding company involved in property development and investment, hospitality and leisure, securities trading, and media and entertainment operations across Hong Kong, Macau, and Mainland China with a market capitalization of approximately HK$5.91 billion.

Operations: Revenue primarily comes from property investment, generating HK$217.63 million, followed by leisure activities at HK$49.69 million and securities trading at HK$20.19 million.

Tomson Group, a relatively smaller player in the real estate sector, has seen its earnings skyrocket by 2337% over the past year, outpacing the industry's -11% performance. Despite this impressive growth, shareholders experienced dilution recently. The company's debt-to-equity ratio improved from 10.4 to 8.8 over five years, indicating better financial management. However, it lacks positive free cash flow and has faced an average annual earnings decrease of 23% over five years. With high-quality past earnings and more cash than total debt, Tomson seems well-positioned but faces challenges in sustaining growth momentum amidst industry pressures.

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

• Assess Tomson Group's past performance with our detailed historical performance reports.

Hazama Ando (TSE:1719)

Simply Wall St Value Rating: ★★★★★★

Overview: Hazama Ando Corporation operates in the construction and construction-related sectors both domestically and internationally, with a market cap of ¥186.52 billion.

Operations: Hazama Ando generates revenue primarily from its Construction Business, which brought in ¥240.98 billion, and the Civil Engineering Business, contributing ¥126.44 billion. The Group Business segment added ¥86.12 billion to the total revenue stream.

Hazama Ando, a notable player in the construction sector, has demonstrated impressive earnings growth of 49.8% over the past year, outpacing the industry's 20.7%. The company's debt-to-equity ratio has improved from 21.9% to 19% over five years, indicating prudent financial management. With a price-to-earnings ratio of 11.1x below Japan's market average of 13.7x, it appears undervalued relative to peers. Recent half-year results show sales at ¥175 billion and net income at ¥6.55 billion with earnings per share at ¥41.82, reflecting robust operational performance despite forecasted slight earnings decline in coming years by an average of 0.2%.

• Click to explore a detailed breakdown of our findings in Hazama Ando's health report.

• Learn about Hazama Ando's historical performance.

Where To Now?

• Click here to access our complete index of 4628 Undiscovered Gems With Strong Fundamentals.
• Invested in any of these stocks? Simplify your portfolio management with Simply Wall St and stay ahead with our alerts for any critical updates on your stocks.
• Enhance your investing ability with the Simply Wall St app and enjoy free access to essential market intelligence spanning every continent.

Ready For A Different Approach?

• 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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