Discovering US Undiscovered Gems in April 2025

Over the last 7 days, the United States market has experienced a slight decline of 1.1%, yet it has shown resilience with a 5.9% increase over the past year and an optimistic forecast of 13% annual earnings growth. In this dynamic environment, discovering stocks that are often overlooked but have strong fundamentals and growth potential can be key to capitalizing on emerging opportunities.

Top 10 Undiscovered Gems With Strong Fundamentals In The United States

Click here to see the full list of 287 stocks from our US Undiscovered Gems With Strong Fundamentals screener.

Let's uncover some gems from our specialized screener.

Merchants Bancorp (NasdaqCM:MBIN)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Merchants Bancorp is a diversified bank holding company in the United States with a market capitalization of approximately $1.49 billion.

Operations: Merchants Bancorp generates revenue primarily through its Banking segment ($338.12 million), followed by Multi-Family Mortgage Banking ($174.19 million) and Mortgage Warehousing ($131.14 million).

Merchants Bancorp, a financial institution with total assets of US$18.8 billion and equity of US$2.2 billion, presents an intriguing profile. Total deposits stand at US$11.9 billion against loans totaling US$10.4 billion, highlighting a net interest margin of 3%. Despite high-quality earnings and earnings growth of 16% over the past year, the bank faces challenges with a high level of bad loans at 2.7% and a low allowance for these loans at 30%. Recently, the company declared dividends on both common and preferred shares, reflecting its commitment to returning value to shareholders amidst these dynamics.

• Delve into the full analysis health report here for a deeper understanding of Merchants Bancorp.

• Understand Merchants Bancorp's track record by examining our Past report.

1st Source (NasdaqGS:SRCE)

Simply Wall St Value Rating: ★★★★★★

Overview: 1st Source Corporation is a bank holding company for 1st Source Bank, offering commercial and consumer banking, trust and wealth advisory services, and insurance products to individuals and businesses in the United States, with a market cap of approximately $1.38 billion.

Operations: 1st Source derives its revenue primarily from commercial banking, generating $374.66 million.

1st Source stands out with its robust financial health, boasting total assets of US$8.9B and equity of US$1.2B. The bank's deposits reach US$7.2B against loans of US$6.7B, reflecting a strong balance sheet backed by 93% low-risk funding sources like customer deposits. It maintains an appropriate level of bad loans at just 0.4%, supported by a sufficient allowance for bad loans at 506%. Trading significantly below fair value estimates, it offers potential upside while having grown earnings by 6.2% last year, outperforming the industry average growth rate of just 0.03%.

• Dive into the specifics of 1st Source here with our thorough health report.

• Gain insights into 1st Source's past trends and performance with our Past report.

Live Oak Bancshares (NYSE:LOB)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Live Oak Bancshares, Inc. is a bank holding company for Live Oak Banking Company, offering a range of banking products and services in the United States with a market cap of approximately $1.10 billion.

Operations: Live Oak Bancshares generates revenue primarily through its banking platform for small businesses, amounting to $402.94 million.

Live Oak Bancshares, with total assets of US$12.9 billion and equity of US$1 billion, is carving a niche in the banking sector by leveraging its primarily low-risk funding structure, where 98% of liabilities are customer deposits. The bank's earnings growth outpaced the industry at 4.8%, despite facing challenges like high bad loans at 3.6% and insufficient allowance for these loans at 45%. Trading significantly below fair value estimates, it offers potential upside as it invests in AI to streamline operations and enhance margins. Recent executive changes and delayed SEC filings could impact investor sentiment moving forward.

• Live Oak Bancshares leverages small business momentum and AI to enhance earnings. Click here to explore the full narrative on Live Oak Bancshares.

Seize The Opportunity

• Delve into our full catalog of 287 US Undiscovered Gems With Strong Fundamentals here.
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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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