Discovering Middle East's Undiscovered Gems in May 2025

As Middle Eastern markets experience a positive shift, with most Gulf indices settling higher amid the cautious optimism surrounding the U.S.-China trade truce, investors are increasingly focusing on small-cap stocks that may offer unique growth opportunities. In this dynamic environment, identifying stocks with strong fundamentals and potential resilience to global economic fluctuations can be key to uncovering hidden gems in the region.

Top 10 Undiscovered Gems With Strong Fundamentals In The Middle East

Click here to see the full list of 248 stocks from our Middle Eastern Undiscovered Gems With Strong Fundamentals screener.

Let's explore several standout options from the results in the screener.

Emlak Konut Gayrimenkul Yatirim Ortakligi (IBSE:EKGYO)

Simply Wall St Value Rating: ★★★★★☆

Overview: Emlak Konut Gayrimenkul Yatirim Ortakligi, established in 1953, focuses on urbanization and enhancing quality of life through real estate development, with a market cap of TRY53.05 billion.

Operations: Emlak Konut generates revenue primarily from real estate sales and development activities. The company focuses on urbanization projects, aiming to enhance the quality of life through its developments. It has a market capitalization of TRY53.05 billion, reflecting its significant presence in the real estate sector.

Emlak Konut, a notable player in the Middle Eastern real estate scene, has shown significant financial improvement. The debt to equity ratio has impressively dropped from 34.7% to 13.5% over five years, indicating stronger balance sheet health. With a net income of TRY 3,253 million for Q1 2025 compared to TRY 113 million the previous year and an attractive price-to-earnings ratio of just 4x against the TR market's average of 18.9x, Emlak Konut seems undervalued. Although free cash flow remains negative, its profitability and high-quality earnings suggest potential for robust future growth in revenue forecasted at an annual rate of 24%.

• Navigate through the intricacies of Emlak Konut Gayrimenkul Yatirim Ortakligi with our comprehensive health report here.

• Gain insights into Emlak Konut Gayrimenkul Yatirim Ortakligi's past trends and performance with our Past report.

Saudi Steel Pipes (SASE:1320)

Simply Wall St Value Rating: ★★★★★★

Overview: Saudi Steel Pipes Company manufactures and distributes steel pipes in the Kingdom of Saudi Arabia and internationally, with a market cap of SAR2.86 billion.

Operations: Saudi Steel Pipes generates revenue primarily from the manufacturing and distribution of steel pipes. The company focuses on serving both domestic and international markets, contributing to its financial performance. With a market cap of SAR2.86 billion, it operates within the industrial sector in Saudi Arabia.

Saudi Steel Pipes is a promising player in the Middle East's industrial landscape, with a net debt to equity ratio of 13.2%, reflecting prudent financial management. The company has reduced its debt to equity ratio from 56.6% to 30.8% over five years, showcasing effective leverage control. Despite facing a negative earnings growth of -21.6% last year against industry norms, it remains well-positioned with interest payments covered by EBIT at 9.4 times over, indicating robust operational efficiency. Recent reports show sales at SAR 453 million and net income at SAR 50 million for Q1 2025, slightly down from the previous year but still solid overall performance indicators.

• Delve into the full analysis health report here for a deeper understanding of Saudi Steel Pipes.

• Evaluate Saudi Steel Pipes' historical performance by accessing our past performance report.

Matrix IT (TASE:MTRX)

Simply Wall St Value Rating: ★★★★★★

Overview: Matrix IT Ltd., along with its subsidiaries, offers a range of information technology solutions and services across Israel, the United States, Europe, and other international markets, with a market capitalization of ₪6.12 billion.

Operations: Matrix IT generates revenue primarily from its Information Technology Solutions and Services in Israel, which accounts for ₪3.34 billion, followed by Cloud and Computing Infrastructure at ₪1.52 billion. The company's marketing and support of software products contribute ₪456.77 million, while its U.S.-based IT solutions add another ₪460.94 million to the total revenue stream.

Matrix IT showcases a solid financial profile with high-quality earnings and positive free cash flow. Trading at 38.9% below its estimated fair value, it seems undervalued given its consistent performance. Over five years, the company reduced its debt to equity ratio from 117.4% to 68.6%, indicating improved financial health, while maintaining satisfactory net debt levels at 10.2%. Despite not outpacing the IT industry's growth of 24.5%, Matrix's earnings grew by a respectable 19.8% last year and have increased by an average of 10.4% annually over five years, highlighting steady progress in profitability and operational efficiency.

• Click here to discover the nuances of Matrix IT with our detailed analytical health report.

• Examine Matrix IT's past performance report to understand how it has performed in the past.

Turning Ideas Into Actions

• Navigate through the entire inventory of 248 Middle Eastern Undiscovered Gems With Strong Fundamentals here.
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Seeking Other Investments?

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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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