Three Undiscovered Gems in the United States with Promising Potential

The market is up 4.9% in the last 7 days, with all sectors gaining ground. In the last year, the market has climbed 26%, and earnings are forecast to grow by 15% annually. In this robust environment, finding stocks with strong fundamentals and growth potential can be particularly rewarding. Here are three undiscovered gems in the United States that show promising potential based on current market conditions.

Top 10 Undiscovered Gems With Strong Fundamentals In The United States

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Morris State Bancshares	10.20%	-0.32%	6.73%	★★★★★★
QDM International	NA	123.47%	83.88%	★★★★★★
Teekay	NA	-6.48%	55.79%	★★★★★★
Mission Bancorp	25.37%	16.23%	20.16%	★★★★★★
Omega Flex	NA	1.31%	3.88%	★★★★★★
First Northern Community Bancorp	NA	7.12%	10.04%	★★★★★★
Longduoduo	NA	69.14%	101.50%	★★★★★★
Valhi	38.71%	2.57%	-19.76%	★★★★★☆
Village Super Market	17.52%	6.27%	19.60%	★★★★☆☆
FRMO	0.17%	12.99%	23.62%	★★★★☆☆

Click here to see the full list of 223 stocks from our US Undiscovered Gems With Strong Fundamentals screener.

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

Merchants Bancorp (NasdaqCM:MBIN)

Simply Wall St Value Rating: ★★★★★☆

Overview: Merchants Bancorp operates as a diversified bank holding company in the United States with a market cap of $1.99 billion.

Operations: Merchants Bancorp generates revenue primarily from three segments: Banking ($324.39 million), Mortgage Warehousing ($132.25 million), and Multi-Family Mortgage Banking ($155.67 million).

Merchants Bancorp, with total assets of US$18.2 billion and equity of US$1.9 billion, has seen a 40.6% earnings growth over the past year, outperforming the Diversified Financial industry’s 12.5%. It holds US$14.9 billion in deposits and US$10.9 billion in loans, achieving a net interest margin of 3.1%. Despite being dropped from several Russell indices recently, MBIN trades at 60.3% below its estimated fair value and declared dividends for Q3 2024.

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

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

Lifeway Foods (NasdaqGM:LWAY)

Simply Wall St Value Rating: ★★★★★★

Overview: Lifeway Foods, Inc. produces and markets probiotic-based products in the United States and internationally, with a market cap of $275.40 million.

Operations: Lifeway Foods generates revenue primarily from cultured dairy products, totaling $176.78 million. The company has a market cap of $275.40 million.

Lifeway Foods has shown impressive growth, with earnings up 139.1% over the past year, far outpacing the food industry's 0.2%. The company has no debt now, a significant improvement from five years ago when its debt-to-equity ratio was 11.1%. Recent financials highlight sales of US$49.16 million for Q2 2024 and net income of US$3.78 million, both higher than last year’s figures. However, insider selling has been significant in the past three months, reflecting some internal challenges amidst strong performance indicators.

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

• Learn about Lifeway Foods' historical performance.

Valhi (NYSE:VHI)

Simply Wall St Value Rating: ★★★★★☆

Overview: Valhi, Inc. operates in the chemicals, component products, and real estate management and development sectors across Europe, North America, the Asia Pacific, and internationally with a market cap of $695.20 million.

Operations: Valhi, Inc. generates revenue primarily from its chemicals segment ($1.78 billion), followed by component products ($157.40 million) and real estate management and development ($78.50 million). The net profit margin for the company is %.

Valhi has demonstrated significant earnings growth of 215.4% over the past year, contrasting sharply with the Chemicals industry's -4.8%. The company's net debt to equity ratio stands at a satisfactory 8.6%, down from 78% five years ago, reflecting prudent financial management. Recent results show Q2 sales at US$559.7 million, up from US$507.1 million last year, and a net income of US$19.9 million compared to a previous loss of US$3.2 million, indicating robust performance improvements.

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

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

Next Steps

• Explore the 223 names from our US Undiscovered Gems With Strong Fundamentals screener here.
• Have a stake in these businesses? Integrate your holdings into Simply Wall St's portfolio for notifications and detailed stock reports.
• Discover a world of investment opportunities with Simply Wall St's free app and access unparalleled stock analysis across all markets.

Curious About Other Options?

• 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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