Undiscovered Gems in Middle East Stocks to Watch in August 2025

As the Middle East stock markets navigate a mixed landscape amid concerns over U.S. Federal Reserve independence and fluctuating oil prices, investors are keenly observing regional indices for signs of stability and growth. In this dynamic environment, identifying stocks that exhibit resilience and potential for growth becomes crucial, especially as the Gulf economies adjust to global monetary shifts and local economic developments.

Top 10 Undiscovered Gems With Strong Fundamentals In The Middle East

Click here to see the full list of 212 stocks from our Middle Eastern Undiscovered Gems With Strong Fundamentals screener.

Here we highlight a subset of our preferred stocks from the screener.

Saudi Real Estate (SASE:4020)

Simply Wall St Value Rating: ★★★★★☆

Overview: Saudi Real Estate Company, with a market cap of SAR6.77 billion, operates as a real estate development company in Saudi Arabia through its various subsidiaries.

Operations: The company generates revenue primarily from property sales (SAR979.16 million) and infrastructure projects (SAR891.41 million), with additional income from rentals, facility management, and construction projects. A notable aspect of its financials is the net profit margin trend, which reflects the company's ability to manage costs relative to its revenue streams effectively.

Saudi Real Estate, a smaller player in the region, has shown impressive financial resilience and growth. Recent earnings for Q2 2025 reported a net income of SAR 94 million, a significant turnaround from last year's SAR 14 million loss. The company's debt management is commendable with a net debt to equity ratio at 28%, considered satisfactory. Additionally, their interest payments are well-covered by EBIT at 3.9x coverage. A strategic partnership has been established to develop educational complexes valued at SAR 275 million, promising an annual rental income of SAR 22 million starting Q3 2025, enhancing future revenue streams.

• Navigate through the intricacies of Saudi Real Estate with our comprehensive health report here.

• Learn about Saudi Real Estate's historical performance.

Mohammed Hadi Al-Rasheed (SASE:9601)

Simply Wall St Value Rating: ★★★★★☆

Overview: Mohammed Hadi Al-Rasheed Company specializes in the production of silica sand for industrial applications and has a market capitalization of SAR 1.40 billion.

Operations: The company's primary revenue stream is from sales, contributing SAR 273.90 million, with an additional SAR 33.12 million from contracting services.

Mohammed Hadi Al-Rasheed stands out with its impressive earnings growth of 80.6% over the past year, surpassing the Basic Materials industry's 54.3%. The company trades at a significant discount, about 53.1% below estimated fair value, indicating potential upside for investors. Free cash flow is robust and positive, with recent figures showing US$56 million as of December 2024. Despite this financial strength, share price volatility has been notable in recent months. High-quality earnings and strong interest coverage (92.7x EBIT) further underscore its solid financial footing amidst market fluctuations.

• Unlock comprehensive insights into our analysis of Mohammed Hadi Al-Rasheed stock in this health report.

• Explore historical data to track Mohammed Hadi Al-Rasheed's performance over time in our Past section.

Qualitau (TASE:QLTU)

Simply Wall St Value Rating: ★★★★★★

Overview: Qualitau Ltd develops, manufactures, and sells test equipment and services for the semiconductor industry targeting European and Far-Eastern markets, with a market cap of ₪1.82 billion.

Operations: Qualitau generates revenue primarily from its electronic components and parts segment, totaling $46.25 million. The company's market capitalization stands at ₪1.82 billion.

Qualitau, a nimble player in the semiconductor space, has been making waves with its impressive earnings growth of 13.1% over the past year, outpacing the industry average of 1.1%. The company boasts high-quality earnings and operates without debt, which eliminates concerns about interest coverage. Its levered free cash flow reached US$12.13 million as of September 2024, indicating strong financial health despite recent volatility in share price over the last three months. A special shareholders meeting scheduled for August suggests potential strategic moves on the horizon that could influence future growth trajectories.

• Delve into the full analysis health report here for a deeper understanding of Qualitau.

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

Summing It All Up

• Explore the 212 names from our Middle Eastern Undiscovered Gems With Strong Fundamentals screener here.
• Got skin in the game with these stocks? Elevate how you manage them by using Simply Wall St's portfolio, where intuitive tools await to help optimize your investment outcomes.
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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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