Uncovering 3 Hidden Swedish Gems with Strong Financials

As global markets react to China's robust stimulus measures and hopes for a rebound in industrial demand, European indices have also shown positive momentum, with the STOXX Europe 600 Index climbing 2.69%. Amidst this optimistic backdrop, discerning investors are turning their attention to smaller markets like Sweden, where hidden gems with strong financials can offer compelling opportunities. In such market conditions, a good stock often exhibits solid financial health and resilience against broader economic fluctuations. This article will uncover three lesser-known Swedish stocks that stand out for their robust balance sheets and promising 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	9.02%	15.02%	★★★★★★
Firefly	NA	16.04%	32.29%	★★★★★★
AB Traction	NA	5.38%	5.19%	★★★★★★
Svolder	NA	-22.68%	-24.17%	★★★★★★
Byggmästare Anders J Ahlström Holding	NA	30.31%	-9.00%	★★★★★★
Creades	NA	-28.54%	-27.09%	★★★★★★
Linc	NA	56.01%	0.54%	★★★★★★
Solid Försäkringsaktiebolag	NA	7.64%	28.44%	★★★★☆☆

Click here to see the full list of 58 stocks from our Swedish Undiscovered Gems With Strong Fundamentals screener.

Let's explore several standout options from the results in the screener.

Creades (OM:CRED A)

Simply Wall St Value Rating: ★★★★★★

Overview: Creades AB is a private equity and venture capital investment firm specializing in various stages of venture and growth investments, with a market cap of SEK11.29 billion.

Operations: Creades AB generates revenue primarily from its investments in online retailers, amounting to SEK 1.11 billion.

Creades has shown impressive earnings growth of 129.4% over the past year, significantly outpacing the Diversified Financial industry’s 80.2%. With a price-to-earnings ratio of 10.3x, it remains attractively valued compared to the Swedish market average of 23.9x. In recent developments, Creades reported second-quarter revenue of SEK 833 million and net income of SEK 771 million, marking a substantial turnaround from last year's negative figures in both categories.

• Navigate through the intricacies of Creades with our comprehensive health report here.

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

ITAB Shop Concept (OM:ITAB)

Simply Wall St Value Rating: ★★★★★★

Overview: ITAB Shop Concept AB (publ) offers solution design, customized shop fittings, checkouts, consumer flow solutions, professional lighting systems, and digitally interactive solutions for physical stores with a market cap of approximately SEK7.60 billion.

Operations: Revenue for ITAB Shop Concept AB (publ) primarily comes from its Furniture & Fixtures segment, which generated SEK6.39 billion. The company has a market cap of approximately SEK7.60 billion.

ITAB Shop Concept, a Swedish company specializing in retail solutions, has seen significant financial improvements. Over the past five years, its debt to equity ratio dropped from 137.6% to 20%, indicating better financial health. Recent earnings growth of 56.7% outpaced the Commercial Services industry at -2%. The company’s net debt to equity ratio stands at a satisfactory 8.8%, and it trades at 4.3% below estimated fair value, suggesting potential for investment upside despite recent share price volatility.

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

• Evaluate ITAB Shop Concept's historical performance by accessing our past performance report.

OEM International (OM:OEM B)

Simply Wall St Value Rating: ★★★★★★

Overview: OEM International AB (publ), along with its subsidiaries, supplies products and systems for industrial applications and has a market cap of SEK16.39 billion.

Operations: OEM International AB (publ) generates revenue from its operations in Sweden (SEK 3.28 billion), Finland, the Baltic States and China (SEK 1.05 billion), and Denmark, Norway, the British Isles and East Central Europe (SEK 1.20 billion). The company also accounts for eliminations of SEK -504.60 million and a segment adjustment of SEK 136.10 million in its financials.

OEM International has seen its debt to equity ratio drop significantly from 29.7% to 2% over the past five years, indicating strong financial management. Despite a negative earnings growth of -5.9% last year, it trades at 61.1% below its estimated fair value, suggesting potential undervaluation. Recent reports show second-quarter sales at SEK 1,331 million with net income of SEK 139 million, down from SEK 157 million a year ago.

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

• Learn about OEM International's historical performance.

Next Steps

• Dive into all 58 of the Swedish Undiscovered Gems With Strong Fundamentals we have identified 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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Searching for a Fresh Perspective?

• 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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