Spotlighting Undiscovered Gems On None In December 2024

As global markets navigate a landscape marked by central bank rate cuts and mixed index performances, small-cap stocks have faced challenges, with the Russell 2000 Index underperforming against larger peers like the S&P 500. This environment of economic uncertainty and shifting monetary policies presents an intriguing backdrop for investors seeking undiscovered gems—stocks that may offer potential growth opportunities despite broader market volatility.

Top 10 Undiscovered Gems With Strong Fundamentals

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Eagle Financial Services	170.75%	12.30%	1.92%	★★★★★★
Omega Flex	NA	0.39%	2.57%	★★★★★★
FRoSTA	8.18%	4.36%	16.00%	★★★★★★
Ovostar Union	0.01%	10.19%	49.85%	★★★★★★
Tianyun International Holdings	10.09%	-5.59%	-9.92%	★★★★★★
MAPFRE Middlesea	NA	14.56%	1.77%	★★★★★☆
HOMAG Group	NA	-31.14%	23.43%	★★★★★☆
Elite Color Environmental Resources Science & Technology	30.80%	12.99%	1.83%	★★★★★☆
Procimmo Group	157.49%	0.65%	4.94%	★★★★☆☆
A2B Australia	15.83%	-7.78%	25.44%	★★★★☆☆

Click here to see the full list of 4502 stocks from our Undiscovered Gems With Strong Fundamentals screener.

Underneath we present a selection of stocks filtered out by our screen.

Oki Electric Industry (TSE:6703)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Oki Electric Industry Co., Ltd. engages in the manufacturing and sale of products, technologies, software, and solutions for telecommunication and information systems both in Japan and internationally, with a market capitalization of approximately ¥91.65 billion.

Operations: Oki Electric Industry generates revenue primarily from Enterprise Solutions, contributing ¥203.66 billion, followed by Public Solution at ¥100.10 billion and Component Products at ¥81.69 billion. The EMS segment also adds to the revenue with ¥70.44 billion.

Oki Electric Industry stands out with its impressive earnings growth of 783% over the past year, significantly outperforming the electronic industry's -1.6%. Despite a high net debt to equity ratio of 52%, it offers good value with a price-to-earnings ratio of 3x, well below Japan's market average. Recent developments include an ultracompact photonic chip poised to revolutionize optical sensor applications and a contract for satellite components with Astroscale Japan, highlighting its robust space-quality manufacturing capabilities. The company anticipates net sales of ¥460 billion and operating profit of ¥16 billion for fiscal year ending March 2025.

• Dive into the specifics of Oki Electric Industry here with our thorough health report.

• Explore historical data to track Oki Electric Industry's performance over time in our Past section.

Namura Shipbuilding (TSE:7014)

Simply Wall St Value Rating: ★★★★★★

Overview: Namura Shipbuilding Co., Ltd. is involved in the global manufacture and sale of ships, machinery, and steel structures, with a market cap of ¥111.49 billion.

Operations: Namura Shipbuilding generates revenue primarily from new ship construction, amounting to ¥119.29 billion, and ship repairs at ¥20.71 billion. The steel structure and machinery segment contributes ¥6.12 billion to the revenue stream.

Namura Shipbuilding, a compact player in the industry, has shown impressive earnings growth of 263% over the past year, outpacing the broader machinery sector. Trading at 95% below its estimated fair value suggests potential undervaluation. The company boasts high-quality past earnings and maintains a positive free cash flow position. Over five years, Namura's debt-to-equity ratio improved from 26.6 to 13.1, indicating better financial health. Despite recent share price volatility, it seems well-positioned with more cash than total debt and no issues covering interest payments due to robust profitability.

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

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

Leopalace21 (TSE:8848)

Simply Wall St Value Rating: ★★★★★★

Overview: Leopalace21 Corporation, with a market cap of ¥182.36 billion, operates in Japan through its construction, leasing, and sale of apartments, condominiums, and residential housing.

Operations: Leopalace21's primary revenue stream is its Leasing Business, including development, which generated ¥411.98 billion. The Elderly Care Business contributed an additional ¥13.79 billion to the company's revenue.

Leopalace21, a real estate player, has seen its earnings soar by 46% in the past year, outpacing the industry average of 20%. Despite legal challenges involving shareholder lawsuits over maintenance outsourcing expenses totaling ¥3.52 billion, the company remains on solid financial ground with a reduced debt-to-equity ratio from 55% to 35% over five years and free cash flow positivity. Trading at an estimated 70% below fair value suggests potential upside for investors. The recent interim dividend of ¥5 per share underscores its commitment to returning profits to shareholders while navigating these legal hurdles.

• Unlock comprehensive insights into our analysis of Leopalace21 stock in this health report.

• Assess Leopalace21's past performance with our detailed historical performance reports.

Turning Ideas Into Actions

• Reveal the 4502 hidden gems among our Undiscovered Gems With Strong Fundamentals screener with a single click here.
• Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments.
• Streamline your investment strategy with Simply Wall St's app for free and benefit from extensive research on stocks across all corners of the world.

Ready To Venture Into Other Investment Styles?

• 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