US Undiscovered Gems To Watch In August 2025

As the U.S. stock market navigates a week marked by investor anticipation of potential Federal Reserve interest rate cuts, small-cap stocks remain an intriguing focus amid broader economic discussions. With the Dow Jones Industrial Average hitting record highs and consumer confidence reports exceeding expectations, identifying promising small-cap stocks can offer unique opportunities for investors seeking growth potential in a dynamic environment.

Top 10 Undiscovered Gems With Strong Fundamentals In The United States

Click here to see the full list of 285 stocks from our US Undiscovered Gems With Strong Fundamentals screener.

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

Frequency Electronics (FEIM)

Simply Wall St Value Rating: ★★★★★★

Overview: Frequency Electronics, Inc. specializes in the design and production of precision time and frequency control products for microwave integrated circuit applications, with a market cap of $282.21 million.

Operations: The company generates revenue primarily from its FEI-NY segment, which contributes $53.27 million, and the FEI-Zyfer segment, adding $18.66 million.

Frequency Electronics, a nimble player in the electronics sector, has been making waves with its impressive financial turnaround. Over the past year, earnings skyrocketed by 323%, outpacing the industry's -2% slump. Despite a volatile share price recently, it's trading at 30.9% below estimated fair value, hinting at potential upside for investors. With no debt on its books now compared to a 9.2% debt-to-equity ratio five years ago and high-quality non-cash earnings boosting its profile, this company seems poised for continued growth as it rides on forecasted revenue increases of nearly 15% annually.

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

• Understand Frequency Electronics' track record by examining our Past report.

Southern First Bancshares (SFST)

Simply Wall St Value Rating: ★★★★★★

Overview: Southern First Bancshares, Inc. is the bank holding company for Southern First Bank, offering commercial, consumer, and mortgage loans across South Carolina, North Carolina, and Georgia with a market cap of $367.64 million.

Operations: Southern First generates revenue primarily from its banking operations, totaling $102.88 million. The company focuses on providing commercial, consumer, and mortgage loans in specific regions.

Southern First Bancshares, with assets totaling US$4.3 billion and equity of US$345.5 million, showcases a robust financial profile. Deposits stand at US$3.6 billion against loans of US$3.7 billion, reflecting solid lending activity supported by a net interest margin of 2.1%. The bank maintains a sufficient allowance for bad loans at 0.3% of total loans, indicating prudent risk management practices amidst its growth trajectory where earnings surged by 58% last year—outpacing the industry average significantly—and are expected to grow annually by over 27%. Despite recent insider selling, the company’s price-to-earnings ratio remains attractive at 16.7x compared to the broader market's 19.3x.

• Navigate through the intricacies of Southern First Bancshares with our comprehensive health report here.

• Explore historical data to track Southern First Bancshares' performance over time in our Past section.

Peoples Financial Services (PFIS)

Simply Wall St Value Rating: ★★★★★★

Overview: Peoples Financial Services Corp. is a company that offers commercial and retail banking services, with a market capitalization of $528.42 million.

Operations: Peoples Financial Services generates revenue primarily from its banking services, totaling $165.60 million.

Peoples Financial Services, with total assets of US$5.1 billion and equity of US$494.1 million, stands out for its robust financial health. Total deposits reach US$4.3 billion while loans total US$4 billion, supported by a solid net interest margin of 2.8%. The bank's allowance for bad loans is sufficient at 0.4% of total loans, reflecting prudent risk management practices. Recent earnings growth hit an impressive 96.9%, far surpassing the industry average of 12.7%. Trading at 34% below estimated fair value signals potential upside for investors eyeing value opportunities in this small-cap financial entity.

• Get an in-depth perspective on Peoples Financial Services' performance by reading our health report here.

• Gain insights into Peoples Financial Services' historical performance by reviewing our past performance report.

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Ready For A Different Approach?

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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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