As global markets react to anticipated interest rate cuts and small-cap stocks outperform their larger counterparts, the Swedish market presents a unique landscape for investors seeking undiscovered opportunities. With Sweden's Riksbank reducing borrowing costs and signaling further rate reductions, now is an opportune time to explore promising small-cap stocks that could benefit from these favorable economic conditions. In this context, identifying a good stock involves looking for companies with solid fundamentals, growth potential in their respective sectors, and resilience amid shifting monetary policies.
Top 10 Undiscovered Gems With Strong Fundamentals In Sweden
Overview: Beijer Alma AB (publ), with a market cap of SEK12.32 billion, operates in component manufacturing and industrial trading across Sweden, the Nordic region, Europe, North America, Asia, and internationally.
Operations: Beijer Alma AB (publ) generates revenue primarily from its Lesjöfors segment, contributing SEK 4.86 billion, and Beijer Tech segment, adding SEK 2.21 billion. The company has a market cap of SEK12.32 billion and operates internationally across multiple regions including Sweden, the Nordic region, Europe, North America, and Asia.
Beijer Alma, a notable player in the Swedish market, has shown promising performance with its recent earnings report. The company reported second-quarter sales of SEK 1.89 billion and net income of SEK 142 million, up from SEK 124 million last year. Over the past five years, their debt to equity ratio increased from 54.2% to 69.1%. Despite this, Beijer Alma's earnings growth of 8.2% outpaced the Machinery industry’s modest rise of 0.9%. Trading at nearly a third below its estimated fair value suggests potential upside for investors seeking value opportunities in Sweden's small-cap sector.
Overview: Bergman & Beving AB (publ) offers solutions for the manufacturing and construction sectors across Sweden, Norway, Finland, and internationally, with a market cap of SEK8.45 billion.
Operations: Bergman & Beving AB (publ) generates revenue primarily from three segments: Core Solutions (SEK 1.41 billion), Safety Technology (SEK 1.62 billion), and Industrial Equipment (SEK 1.76 billion).
Bergman & Beving, a small Swedish company, reported Q1 2024 sales of SEK 1.25 billion and net income of SEK 52 million. The firm’s EBIT covers interest payments four times over, signaling strong earnings quality. Despite trading at nearly 28% below its estimated fair value, the net debt to equity ratio stands at a high 42.6%. Over five years, this ratio has risen from 31.9% to 57.7%, indicating increased leverage but also consistent profitability with positive free cash flow.
Overview: RaySearch Laboratories AB (publ) is a medical technology company that provides software solutions for cancer care across various global regions, with a market capitalization of SEK5.51 billion.
Operations: RaySearch Laboratories generates its revenue primarily from healthcare software, amounting to SEK1.13 billion. The company's financial performance is influenced by its gross profit margin of 93%.
RaySearch Laboratories has shown impressive growth, with earnings surging 187% over the past year, far outpacing the Healthcare Services industry. The company is debt-free and trades at a significant discount of 67.6% below its estimated fair value. Recent developments include a substantial order from the Connecticut Proton Therapy Center for their RayCare system and notable earnings for Q2 2024, with sales reaching SEK 318.87 million and net income hitting SEK 61.43 million compared to SEK 10.92 million last year.
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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.
Companies discussed in this article include OM:BEIA B OM:BERG B and OM:RAY B.
