Three Hidden Swedish Stocks With Strong Potential

The Swedish stock market, like many global markets, has faced headwinds recently due to economic uncertainties and a cooling labor market. Despite these challenges, opportunities still exist for discerning investors willing to explore beyond the well-trodden paths. In this article, we will highlight three lesser-known Swedish stocks that exhibit strong potential based on their innovative approaches and resilience in the current economic climate.

Top 10 Undiscovered Gems With Strong Fundamentals In Sweden

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Bahnhof	NA	9.47%	15.07%	★★★★★★
Softronic	NA	3.58%	7.41%	★★★★★★
Duni	29.33%	10.78%	22.98%	★★★★★★
AB Traction	NA	5.38%	5.19%	★★★★★★
Firefly	NA	15.31%	29.94%	★★★★★★
Creades	NA	-28.54%	-27.09%	★★★★★★
Linc	NA	56.01%	0.54%	★★★★★★
Rederiaktiebolaget Gotland	NA	-14.29%	18.06%	★★★★★★
AQ Group	7.30%	14.89%	22.26%	★★★★★★
Karnell Group	44.29%	22.04%	39.45%	★★★★★☆

Click here to see the full list of 51 stocks from our Swedish Undiscovered Gems With Strong Fundamentals screener.

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

CTT Systems (OM:CTT)

Simply Wall St Value Rating: ★★★★★☆

Overview: CTT Systems AB (publ) designs, manufactures, and sells humidity control systems for aircraft across Sweden, Denmark, France, the United States, and internationally with a market cap of SEK3.42 billion.

Operations: CTT Systems AB (publ) generates revenue primarily from the Aerospace & Defense segment, amounting to SEK317.70 million. The company’s net profit margin stands at 12.5%.

CTT Systems, a notable player in the Aerospace & Defense sector, has seen earnings grow 6.5% annually over the past five years. The company’s debt to equity ratio slightly increased from 16.8 to 17.1 over the same period, but it maintains more cash than total debt and trades at 45.5% below estimated fair value. Recent Q2 results showed sales of SEK 83 million and net income of SEK 24 million, with promising future orders for humidifiers on A350s and Boeing 777Xs from multiple airlines.

• Click here and access our complete health analysis report to understand the dynamics of CTT Systems.

• Understand CTT Systems' track record by examining our Past report.

Scandi Standard (OM:SCST)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Scandi Standard AB (publ) produces and sells chilled, frozen, and ready-to-eat chicken products across various countries including Sweden, Norway, Ireland, Denmark, Finland, Germany, the United Kingdom, and internationally with a market cap of SEK5.28 billion.

Operations: Scandi Standard AB (publ) generates revenue primarily from its Ready-To-Cook segment (SEK9.70 billion) and its Ready-To-Eat segment (SEK2.61 billion).

Scandi Standard, a notable player in the food industry, currently trades at 50.1% below its estimated fair value. The company has reduced its net debt to equity ratio from 121.8% to 61.4% over five years but still holds a high ratio of 59.7%. Interest payments are well-covered by EBIT with a coverage ratio of 3.5x, and earnings are forecasted to grow annually by 20.39%. Recent earnings showed SEK 6,510 million in sales for six months ending June and SEK 141 million net income compared to SEK 127 million last year.

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

• Learn about Scandi Standard's historical performance.

Teqnion (OM:TEQ)

Simply Wall St Value Rating: ★★★★★★

Overview: Teqnion AB (publ) is a diversified industrial company operating in industry, growth, and niche business areas with a market cap of SEK 3.22 billion.

Operations: Teqnion AB (publ) generates revenue through its diversified operations across industry, growth, and niche business areas. The company reported a market cap of SEK 3.22 billion.

Teqnion, a promising small cap in Sweden, reported SEK 399.7 million in sales for Q2 2024, up from SEK 383.9 million last year. Net income for the same period was SEK 34.5 million compared to SEK 33 million previously. Over the past year, earnings grew by 2.6%, outpacing the Trade Distributors industry’s growth of 1.3%. Debt to equity ratio improved from 37.8% to 30.9% over five years, and it's trading at nearly 40% below fair value estimates.

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

• Gain insights into Teqnion's historical performance by reviewing our past performance report.

Turning Ideas Into Actions

• Reveal the 51 hidden gems among our Swedish Undiscovered Gems With Strong Fundamentals screener with a single click here.
• Are these companies part of your investment strategy? Use Simply Wall St to consolidate your holdings into a portfolio and gain insights with our comprehensive analysis tools.
• Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors.

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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