Undiscovered Gems In Sweden Featuring Three Promising Small Caps

In the wake of recent announcements by central banks to cut interest rates, small-cap stocks have shown remarkable resilience and outperformance in global markets. Sweden's Riksbank has also joined this trend, reducing borrowing costs and signaling further rate cuts, creating a favorable environment for small-cap companies. Identifying promising small-cap stocks often involves looking for robust business models, innovative products or services, and strong growth potential—qualities that can thrive in the current economic landscape shaped by lower interest rates.

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	15.90%	31.36%	★★★★★★
Creades	NA	-28.54%	-27.09%	★★★★★★
AQ Group	7.30%	14.89%	22.26%	★★★★★★
Byggmästare Anders J Ahlström Holding	NA	33.57%	-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.

Here's a peek at a few of the choices from the screener.

Beijer Alma (OM:BEIA B)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Beijer Alma AB (publ), along with its subsidiaries, operates in component manufacturing and industrial trading across Sweden, the Nordic region, Europe, North America, Asia, and internationally, with a market cap of SEK12.23 billion.

Operations: Lesjöfors generates SEK4.86 billion in revenue, while Beijer Tech contributes SEK2.21 billion.

Beijer Alma, a notable player in the Swedish market, saw its debt to equity ratio rise from 54.2% to 69.1% over five years while maintaining a net debt to equity ratio of 57.8%. The company reported second-quarter sales of SEK 1.89 billion and net income of SEK 142 million, with basic earnings per share at SEK 2.35. Trading at nearly 30% below fair value estimates and showing an annual earnings growth of 8.2%, Beijer Alma is positioned well against industry peers despite its high debt levels and strong EBIT coverage (4.5x).

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

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

Clas Ohlson (OM:CLAS B)

Simply Wall St Value Rating: ★★★★★★

Overview: Clas Ohlson AB (publ) is a retail company that sells hardware, electrical, multimedia, home, and leisure products in Sweden, Norway, Finland, and internationally with a market cap of SEK10.87 billion.

Operations: Clas Ohlson generates revenue primarily from its retail specialty segment, which amounted to SEK10.23 billion. The company's financial performance includes a focus on managing costs and optimizing net profit margins.

Clas Ohlson has shown remarkable growth, with earnings soaring by 181.6% over the past year, outpacing the Specialty Retail industry’s 19.1%. The company reported total sales of SEK 2.62 billion for the year to date ended July 2024, up from SEK 2.19 billion a year earlier. Trading at a significant discount of 67.1% below its estimated fair value and being debt-free since reducing its debt-to-equity ratio from 14.5% five years ago adds to its appeal as an investment opportunity in Sweden's market landscape.

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

• Examine Clas Ohlson's past performance report to understand how it has performed in the past.

Rusta (OM:RUSTA)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Rusta AB (publ) retails home and leisure products in Sweden, Norway, Finland, and Germany with a market cap of SEK11.29 billion.

Operations: Rusta generates revenue primarily from its markets in Sweden (SEK 6.38 billion), Norway (SEK 2.35 billion), and other regions (SEK 2.39 billion).

Rusta has shown impressive earnings growth of 56.3% over the past year, significantly outpacing the Multiline Retail industry’s -5%. The company reported a net income of SEK 408 million for the full year ending April 30, 2024, up from SEK 261 million in the prior year. Trading at 68.4% below its estimated fair value, Rusta also repurchased 267,333 shares for SEK 22 million recently and proposed a dividend increase to SEK 1.15 per share.

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

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

Summing It All Up

• Discover the full array of 55 Swedish Undiscovered Gems With Strong Fundamentals right here.
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Seeking Other Investments?

• 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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