As most Gulf markets retreat ahead of crucial U.S. economic data, investors in the Middle East are navigating a landscape shaped by fluctuating oil prices and the potential implications of the Federal Reserve's monetary policy on regional economies. In this environment, identifying promising stocks involves looking for companies with strong fundamentals and resilience to external economic pressures, which may offer unique opportunities amidst broader market uncertainties.
Top 10 Undiscovered Gems With Strong Fundamentals In The Middle East
| Name | Debt To Equity | Revenue Growth | Earnings Growth | Health Rating |
|---|---|---|---|---|
| Al Wathba National Insurance Company PJSC | 10.97% | 10.37% | 3.14% | ★★★★★★ |
| MOBI Industry | 6.50% | 5.60% | 24.00% | ★★★★★★ |
| Baazeem Trading | 8.48% | -1.74% | -2.37% | ★★★★★★ |
| Sure Global Tech | NA | 11.95% | 18.65% | ★★★★★★ |
| Saudi Azm for Communication and Information Technology | 1.94% | 16.33% | 21.26% | ★★★★★★ |
| Nofoth Food Products | NA | 15.75% | 27.63% | ★★★★★★ |
| Najran Cement | 14.76% | -3.67% | -26.79% | ★★★★★★ |
| National General Insurance (P.J.S.C.) | NA | 14.58% | 25.09% | ★★★★★☆ |
| Etihad Atheeb Telecommunication | 0.97% | 37.69% | 60.25% | ★★★★★☆ |
| National Environmental Recycling | 69.43% | 43.47% | 32.77% | ★★★★☆☆ |
We're going to check out a few of the best picks from our screener tool.
Riyadh Cement (SASE:3092)
Simply Wall St Value Rating: ★★★★★★
Overview: Riyadh Cement Company is engaged in the production and sale of cement across several Middle Eastern countries, including Saudi Arabia, Bahrain, Jordan, Kuwait, Qatar, and Oman, with a market capitalization of SAR3.63 billion.
Operations: Riyadh Cement generates revenue primarily through its cement manufacturing segment, which reported SAR852.96 million. The company's gross profit margin has shown a notable trend over recent periods, reflecting its operational efficiency in the competitive cement industry.
Riyadh Cement, a notable player in the Middle East's cement industry, showcases strong performance indicators. With earnings growth of 57% outpacing the industry average of 54%, it highlights robust operational efficiency. Despite a dip in net income to SAR 57.47 million for Q2 compared to SAR 64.42 million last year, sales climbed to SAR 190.89 million from SAR 163.65 million, indicating solid demand. The company is debt-free and trades at a value below its estimated fair price by about 10%. A cash dividend of SAR 1 per share further underscores its commitment to shareholder returns while maintaining high-quality earnings metrics.
- Get an in-depth perspective on Riyadh Cement's performance by reading our health report here.
Understand Riyadh Cement's track record by examining our Past report.
Gas Arabian Services (SASE:9528)
Simply Wall St Value Rating: ★★★★★★
Overview: Gas Arabian Services Company operates in the Kingdom of Saudi Arabia, offering products and services in automation, instrumentation, field services, mechanical, and piping fields with a market cap of SAR2.84 billion.
Operations: Gas Arabian Services generates revenue primarily through its Trading segment (SAR 525.29 million) and Technical Services segment (SAR 513.91 million), with a smaller contribution from Manufacturing (SAR 53.83 million).
Gas Arabian Services, a nimble player in the Middle East, has been making waves with its impressive financial performance and strategic moves. Over the past year, earnings surged by 39.9%, outpacing the industry average of 16.5%. The company enjoys high-quality earnings and remains debt-free, a notable shift from five years ago when its debt-to-equity ratio was 15.8%. Recently, GAS announced a joint venture with Italy's BONOMI to establish a valve manufacturing company in Saudi Arabia, which is expected to bolster long-term growth. Additionally, it affirmed interim cash dividends of SAR 0.20 per share for early 2025 distribution on August 31st.
Ashot Ashkelon Industries (TASE:ASHO)
Simply Wall St Value Rating: ★★★★★★
Overview: Ashot Ashkelon Industries Ltd. is a company that manufactures and sells systems and components for the aerospace and defense sectors in Israel and internationally, with a market cap of ₪1.70 billion.
Operations: Ashot Ashkelon Industries generates revenue through the sale of aerospace and defense systems and components in both domestic and international markets. The company's cost structure includes manufacturing expenses associated with these products. Its financial performance can be evaluated by examining net profit margin trends over time.
Ashot Ashkelon Industries, a notable player in the Aerospace & Defense sector, showcases robust financial health with an EBIT covering interest payments 6.3 times over and a satisfactory net debt to equity ratio of 10.9%. Over the last five years, earnings have grown annually by 40.6%, reflecting high-quality earnings. Recent reports indicate sales for Q2 2025 at ILS 119 million, up from ILS 88 million the previous year, while net income rose to ILS 14.7 million from ILS 12.33 million. The company's profitability and positive free cash flow suggest solid operational efficiency amidst industry challenges.
- Dive into the specifics of Ashot Ashkelon Industries here with our thorough health report.
Evaluate Ashot Ashkelon Industries' historical performance by accessing our past performance report.
Taking Advantage
- Delve into our full catalog of 207 Middle Eastern Undiscovered Gems With Strong Fundamentals here.
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Want To Explore Some Alternatives?
- 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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