Three Undiscovered Gems in Sweden with Promising Potential

As European inflation nears the central bank's target and key indices like the STOXX Europe 600 Index hit record highs, the Swedish market presents a fertile ground for discovering promising small-cap stocks. In this environment, identifying companies with strong fundamentals and growth potential becomes crucial for investors seeking to capitalize on emerging opportunities.

Top 10 Undiscovered Gems With Strong Fundamentals In Sweden

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Softronic	NA	3.58%	7.41%	★★★★★★
Duni	29.33%	10.78%	22.98%	★★★★★★
Bahnhof	NA	9.02%	15.02%	★★★★★★
AB Traction	NA	5.38%	5.19%	★★★★★★
Firefly	NA	16.04%	32.29%	★★★★★★
Creades	NA	-28.54%	-27.09%	★★★★★★
AQ Group	7.30%	14.89%	22.26%	★★★★★★
Byggmästare Anders J Ahlström Holding	NA	30.31%	-9.00%	★★★★★★
Linc	NA	56.01%	0.54%	★★★★★★
Solid Försäkringsaktiebolag	NA	7.64%	28.44%	★★★★☆☆

Click here to see the full list of 55 stocks from our Swedish Undiscovered Gems With Strong Fundamentals screener.

Underneath we present a selection of stocks filtered out by our screen.

engcon (OM:ENGCON B)

Simply Wall St Value Rating: ★★★★★☆

Overview: engcon AB (publ) specializes in designing, producing, and selling excavator tools globally, with a market cap of SEK18.00 billion.

Operations: The company generates revenue primarily from the construction machinery and equipment segment, amounting to SEK1.54 billion. Its net profit margin stands at 10.5%.

engcon B, a notable player in the machinery sector, has faced challenging times with a 60.6% earnings drop over the past year and net profit margins falling from 18% to 9.9%. Despite this, their EBIT covers interest payments by 20.4x, showcasing financial stability. Recent announcements revealed Q2 sales of SEK 450 million and net income of SEK 55 million. The company also created a new COO role to bolster future growth prospects.

• Dive into the specifics of engcon here with our thorough health report.

• Explore historical data to track engcon's performance over time in our Past section.

ITAB Shop Concept (OM:ITAB)

Simply Wall St Value Rating: ★★★★★★

Overview: ITAB Shop Concept AB (publ) specializes in designing and providing customized shop fittings, checkouts, consumer flow solutions, professional lighting systems, and digitally interactive solutions for physical stores with a market cap of SEK5.38 billion.

Operations: ITAB Shop Concept AB (publ) generates revenue through the sale of customized shop fittings, checkouts, consumer flow solutions, professional lighting systems, and digitally interactive solutions for physical stores. The company's market cap stands at SEK5.38 billion.

ITAB Shop Concept has shown impressive growth, with earnings increasing by 56.7% over the past year, outpacing the Commercial Services industry. Trading at 22.6% below its estimated fair value, ITAB offers good relative value compared to peers. The company’s debt to equity ratio has significantly improved from 137.6% to 20% in five years, and its interest payments are well covered by EBIT (21x coverage). Recent contracts like a EUR 22 million deal in the UK further bolster its prospects.

• Get an in-depth perspective on ITAB Shop Concept's performance by reading our health report here.

• Examine ITAB Shop Concept's past performance report to understand how it has performed in the past.

TF Bank (OM:TFBANK)

Simply Wall St Value Rating: ★★★★☆☆

Overview: TF Bank AB (publ) is a digital bank offering consumer banking services and e-commerce solutions through its proprietary IT platform, with a market cap of SEK5.72 billion.

Operations: TF Bank generates revenue primarily from three segments: Credit Cards (SEK 511.24 million), Consumer Lending (SEK 607.24 million), and E-commerce Solutions excluding Credit Cards (SEK 363.28 million).

TF Bank, with total assets of SEK24.1B and equity of SEK2.4B, has shown impressive earnings growth of 21.3% over the past year, outpacing the industry average of 10.4%. Trading at 54% below its estimated fair value, it also has a low allowance for bad loans at 62%, though non-performing loans are high at 10.6%. Recently, TF Bank restructured by creating Rediem Capital AB to focus on acquiring non-performing exposures, aiming for specialized debt restructurer status by January 2025.

• Click to explore a detailed breakdown of our findings in TF Bank's health report.

• Gain insights into TF Bank's past trends and performance with our Past report.

Seize The Opportunity

• Explore the 55 names from our Swedish Undiscovered Gems With Strong Fundamentals screener here.
• Hold shares in these firms? Setup your portfolio in Simply Wall St to seamlessly track your investments and receive personalized updates on your portfolio's performance.
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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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