Undiscovered Gems in Sweden to Watch August 2024

As Sweden's Riksbank has recently reduced borrowing costs, the Swedish market is experiencing a favorable environment for small-cap stocks. Amid this backdrop, we explore three promising yet under-the-radar Swedish stocks that could benefit from these economic conditions. In such a dynamic market, identifying strong investment opportunities often involves looking at companies with solid fundamentals and growth potential.

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	9.11%	15.30%	★★★★★★
Firefly	NA	15.90%	31.36%	★★★★★★
AB Traction	NA	5.38%	5.19%	★★★★★★
Creades	NA	-28.54%	-27.09%	★★★★★★
OEM International	2.03%	11.97%	18.62%	★★★★★★
AQ Group	7.30%	14.89%	22.26%	★★★★★★
Linc	NA	56.01%	0.54%	★★★★★★
Solid Försäkringsaktiebolag	NA	7.64%	28.44%	★★★★☆☆

Click here to see the full list of 54 stocks from our Swedish Undiscovered Gems With Strong Fundamentals screener.

Below we spotlight a couple of our favorites from our exclusive screener.

Bergman & Beving (OM:BERG B)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Bergman & Beving AB (publ) offers solutions for the manufacturing and construction sectors in Sweden, Norway, Finland, and internationally with a market cap of SEK8.20 billion.

Operations: Bergman & Beving AB (publ) generates revenue primarily from three segments: Core Solutions (SEK1.41 billion), Safety Technology (SEK1.62 billion), and Industrial Equipment (SEK1.76 billion).

Bergman & Beving, a Swedish trade distributor, reported Q1 2024 earnings with sales of SEK 1.25 billion and net income of SEK 52 million. Despite negative earnings growth over the past year, its EBIT covers interest payments by 4x. The company's net debt to equity ratio stands at a high 42.6%, up from 31.9% five years ago. Trading at nearly 30% below estimated fair value, future earnings are projected to grow annually by about 13%.

• Delve into the full analysis health report here for a deeper understanding of Bergman & Beving.

• Review our historical performance report to gain insights into Bergman & Beving's's past performance.

BioGaia (OM:BIOG B)

Simply Wall St Value Rating: ★★★★★★

Overview: BioGaia AB (publ) is a healthcare company that provides probiotic products worldwide and has a market cap of SEK12.91 billion.

Operations: BioGaia generates revenue primarily from its Pediatrics segment (SEK1.07 billion) and Adult Health segment (SEK288.68 million).

BioGaia, a profitable biotech company, is debt-free and trades at a P/E ratio of 32.1x, below the industry average of 49.4x. Recent earnings show strong performance with Q2 sales reaching SEK 384 million and net income at SEK 111 million. The firm’s strategic expansion into Australia and New Zealand underscores its growth ambitions in high-potential markets. Despite a slight negative earnings growth (-3.3%) last year, future earnings are forecasted to grow by 7.63% annually.

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

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

engcon (OM:ENGCON B)

Simply Wall St Value Rating: ★★★★★☆

Overview: engcon AB (publ) designs, produces, and sells excavator tools across various international markets, with a market cap of SEK16.48 billion.

Operations: engcon AB (publ) generates revenue primarily from its Construction Machinery & Equipment segment, which reported SEK1.54 billion. The company's net profit margin is a key financial metric to consider.

Engcon, a notable player in Sweden's machinery sector, faces challenges with its net profit margin dropping to 9.9% from 18% last year. Despite this, the company shows strong financial health with EBIT covering interest payments 20.4 times and a satisfactory net debt to equity ratio of 8.5%. Recent earnings reports indicate sales fell to SEK 450 million for Q2 2024 from SEK 508 million in the previous year, while net income decreased to SEK 55 million from SEK 83 million.

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

• Assess engcon's past performance with our detailed historical performance reports.

Taking Advantage

• Unlock more gems! Our Swedish Undiscovered Gems With Strong Fundamentals screener has unearthed 51 more companies for you to explore.Click here to unveil our expertly curated list of 54 Swedish Undiscovered Gems With Strong Fundamentals.
• Have you diversified into these companies? Leverage the power of Simply Wall St's portfolio to keep a close eye on market movements affecting your investments.
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Ready To Venture Into Other Investment Styles?

• 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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