As Middle Eastern markets continue to extend gains, buoyed by the recent U.S. tariff relief, investor sentiment remains cautiously optimistic despite ongoing global trade uncertainties. With key indices in Saudi Arabia and Egypt showing upward momentum, this environment presents a unique opportunity to explore stocks that may not yet be on the radar of many investors. Identifying promising stocks often involves looking for companies with strong fundamentals and growth potential that align well with current economic conditions.
Top 10 Undiscovered Gems With Strong Fundamentals In The Middle East
| Name | Debt To Equity | Revenue Growth | Earnings Growth | Health Rating |
|---|---|---|---|---|
| Sure Global Tech | NA | 13.90% | 18.91% | ★★★★★★ |
| Nofoth Food Products | NA | 14.41% | 31.88% | ★★★★★★ |
| MOBI Industry | 6.50% | 5.60% | 24.00% | ★★★★★★ |
| Baazeem Trading | 6.93% | -1.88% | -2.38% | ★★★★★★ |
| Saudi Azm for Communication and Information Technology | 2.07% | 16.18% | 21.11% | ★★★★★★ |
| National Corporation for Tourism and Hotels | 15.77% | -3.48% | -12.95% | ★★★★★★ |
| National General Insurance (P.J.S.C.) | NA | 13.40% | 30.21% | ★★★★★☆ |
| Keir International | 23.18% | 49.21% | -17.98% | ★★★★★☆ |
| Union Coop | 3.73% | -4.15% | -13.19% | ★★★★★☆ |
| Waja | 23.81% | 98.44% | 14.54% | ★★★★☆☆ |
Let's review some notable picks from our screened stocks.
National Gas and Industrialization (SASE:2080)
Simply Wall St Value Rating: ★★★★★☆
Overview: National Gas and Industrialization Company operates in the exploitation, manufacturing, and marketing of various gases and their derivatives, as well as industrial gases in Saudi Arabia and internationally, with a market cap of SAR6.62 billion.
Operations: Revenue for National Gas and Industrialization is primarily derived from its operations in the Central Region, which includes the Gas Solutions Company, contributing SAR1.57 billion, followed by the Western Region with SAR1.26 billion. The Eastern and Southern Regions contribute SAR588.56 million and SAR410.38 million respectively to the overall revenue stream.
National Gas and Industrialization Company, a smaller player in the Middle East's energy sector, reported impressive earnings growth of 9.4% over the past year, outpacing the broader Gas Utilities industry's -6.2%. The company's net income rose to SAR 248.75 million from SAR 227.32 million last year, while sales increased to SAR 2.87 billion from SAR 2.46 billion previously. Despite an uptick in its debt-to-equity ratio to 6.3% over five years, it has more cash than total debt and earns more interest than it pays, indicating solid financial health amidst industry challenges.
Almunajem Foods (SASE:4162)
Simply Wall St Value Rating: ★★★★★★
Overview: Almunajem Foods Company operates in the wholesale and retail trade of various food products, including fruits, vegetables, and frozen meats in Saudi Arabia, with a market cap of SAR4.94 billion.
Operations: The company generates revenue primarily from the Central Region (SAR1.40 billion) and Western & Southern Regions (SAR1.27 billion), with significant contributions also from the Eastern & Northern Regions (SAR678 million).
Almunajem Foods has shown resilience despite a challenging year, with sales increasing to SAR 3.35 billion from SAR 3.31 billion, although net income dipped slightly to SAR 278.65 million from SAR 282.21 million. The company has managed its debt well, reducing the debt-to-equity ratio significantly over five years to a satisfactory level of 4.9%. With a price-to-earnings ratio of 17.9x below the Saudi Arabian market average and high-quality earnings, Almunajem seems poised for steady growth as revenue is forecasted to rise by 3.6% annually, suggesting potential value in this small-cap stock amidst Middle Eastern markets.
- Dive into the specifics of Almunajem Foods here with our thorough health report.
Gain insights into Almunajem Foods' historical performance by reviewing our past performance report.
Saudi Reinsurance (SASE:8200)
Simply Wall St Value Rating: ★★★★☆☆
Overview: Saudi Reinsurance Company offers a range of reinsurance products across Saudi Arabia, the Middle East, Africa, Asia, and globally, with a market capitalization of SAR5.04 billion.
Operations: The company generates revenue primarily from its Property and Casualty segment, contributing SAR1.05 billion, and the Life and Health segment with SAR45.19 million. Notably, it benefits from a gain of SAR365.95 million through the sale of an investment accounted for using the equity method.
Saudi Reinsurance, a small-cap player in the insurance sector, has shown impressive financial resilience with earnings surging by 281.6% over the past year, significantly outpacing the industry's -29.6%. The company's debt to equity ratio increased from 0% to 3.5% over five years but remains manageable as it holds more cash than total debt. Despite shareholder dilution last year, Saudi Reinsurance's EBIT covers interest payments comfortably at 23.4 times coverage. Recent results highlight a net income of SAR 474 million for 2024 and basic earnings per share climbing to SAR 5.33 from SAR 1.4 last year, indicating robust profitability growth potential in its niche market segment.
- Click to explore a detailed breakdown of our findings in Saudi Reinsurance's health report.
Understand Saudi Reinsurance's track record by examining our Past report.
Summing It All Up
- Click here to access our complete index of 246 Middle Eastern Undiscovered Gems With Strong Fundamentals.
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Interested In Other Possibilities?
- 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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