Undiscovered Gems with Strong Potential To Watch This September 2024

The market has been flat over the last week but is up 23% over the past year, with earnings forecast to grow by 15% annually. In this environment, identifying stocks with strong potential involves looking beyond well-known names to uncover lesser-known companies that are poised for growth.

Top 10 Undiscovered Gems With Strong Fundamentals In The United States

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Hamilton Beach Brands Holding	34.31%	1.65%	4.46%	★★★★★★
Morris State Bancshares	10.20%	-0.32%	6.73%	★★★★★★
National Presto Industries	NA	1.58%	-11.29%	★★★★★★
Mission Bancorp	25.37%	16.23%	20.16%	★★★★★★
Teekay	NA	-6.48%	55.79%	★★★★★★
Omega Flex	NA	1.31%	3.88%	★★★★★★
First Northern Community Bancorp	NA	7.12%	10.04%	★★★★★★
Banco Latinoamericano de Comercio Exterior S. A	311.64%	21.07%	24.77%	★★★★★☆
Valhi	38.71%	2.57%	-19.76%	★★★★★☆
FRMO	0.17%	12.99%	23.62%	★★★★☆☆

Click here to see the full list of 217 stocks from our US Undiscovered Gems With Strong Fundamentals screener.

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

Karooooo (NasdaqCM:KARO)

Simply Wall St Value Rating: ★★★★★★

Overview: Karooooo Ltd. offers a mobility software-as-a-service (SaaS) platform for connected vehicles across various regions including South Africa, the rest of Africa, Europe, the Asia-Pacific, the Middle East, and the United States with a market cap of $1.18 billion.

Operations: Karooooo Ltd. generates revenue primarily from its Cartrack segment (ZAR 3.74 billion) and Karooooo Logistics segment (ZAR 355.99 million). The company has a market cap of $1.18 billion.

Earnings for Karooooo have surged by 33.5% over the past year, outpacing the Software industry’s growth of 23.2%. The company’s debt-to-equity ratio has impressively dropped from 21.7% to 3% in five years, showcasing prudent financial management. Trading at a Price-To-Earnings ratio of 26.3x, it is undervalued compared to the industry average of 38.3x. Recent auditor changes and share repurchases totaling $1.45 million underscore its commitment to transparency and shareholder value.

• Take a closer look at Karooooo's potential here in our health report.

• Evaluate Karooooo's historical performance by accessing our past performance report.

Sezzle (NasdaqCM:SEZL)

Simply Wall St Value Rating: ★★★★★☆

Overview: Sezzle Inc. is a technology-enabled payments company operating mainly in the United States and Canada, with a market cap of $762.86 million.

Operations: Sezzle generates revenue primarily through lending to end-customers, amounting to $192.69 million. The company has a market cap of $762.86 million and operates mainly in the United States and Canada.

Sezzle, a dynamic player in the BNPL space, has seen its earnings surge by 434.8% over the past year, outpacing the industry’s 9.7%. The company's debt to equity ratio impressively dropped from 1676.6% to 137% in five years, and it maintains a satisfactory net debt to equity ratio of 21.6%. Recent highlights include a strategic partnership with WebBank and a multi-year deal with the Minnesota Timberwolves, showcasing Sezzle's growing influence and innovative approach in financial services.

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

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

Photronics (NasdaqGS:PLAB)

Simply Wall St Value Rating: ★★★★★★

Overview: Photronics, Inc., along with its subsidiaries, manufactures and sells photomask products and services across the United States, Taiwan, China, Korea, Europe, and internationally with a market cap of approximately $1.64 billion.

Operations: Photronics generates revenue primarily from the manufacture and sale of photomasks, amounting to approximately $871.79 million. The company's market cap is around $1.64 billion.

Photronics, Inc. has shown robust performance with a net income of US$34.39 million for Q3 2024, up from US$26.96 million last year, and basic earnings per share at US$0.56 compared to US$0.44 previously. Despite sales dipping to US$210.98 million from US$224.21 million a year ago, the company’s earnings growth of 19.8% over the past year outpaced the semiconductor industry's -7%. Trading at 61% below its estimated fair value and being debt-free further solidifies its strong financial standing.

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

• Learn about Photronics' historical performance.

Where To Now?

• Get an in-depth perspective on all 217 US Undiscovered Gems With Strong Fundamentals by using our screener here.
• Are these companies part of your investment strategy? Use Simply Wall St to consolidate your holdings into a portfolio and gain insights with our comprehensive analysis tools.
• Streamline your investment strategy with Simply Wall St's app for free and benefit from extensive research on stocks across all corners of the world.

Interested In Other Possibilities?

• 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com