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Undiscovered Gems with Strong Potential for December 2024

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As global markets navigate a landscape marked by interest rate adjustments and mixed economic signals, small-cap stocks have faced notable challenges, with the Russell 2000 Index underperforming larger counterparts like the S&P 500. Amid this backdrop of cautious optimism and shifting monetary policies, identifying promising small-cap opportunities requires a keen eye for companies demonstrating resilience, innovation, and strong fundamentals.

Top 10 Undiscovered Gems With Strong Fundamentals

Name

Debt To Equity

Revenue Growth

Earnings Growth

Health Rating

Sugar Terminals

NA

3.14%

3.53%

★★★★★★

Hong Tai Electric Industrial

0.03%

11.52%

12.52%

★★★★★★

C&D Property Management Group

1.32%

37.15%

41.55%

★★★★★★

Ovostar Union

0.01%

10.19%

49.85%

★★★★★★

Pacific Construction

21.40%

-3.50%

26.25%

★★★★★★

Tianyun International Holdings

10.09%

-5.59%

-9.92%

★★★★★★

Lion Travel Service

1.97%

-0.25%

46.60%

★★★★★☆

Central Finance

1.16%

10.03%

16.10%

★★★★★☆

Huang Hsiang Construction

266.70%

13.12%

15.19%

★★★★☆☆

A2B Australia

15.83%

-7.78%

25.44%

★★★★☆☆

Click here to see the full list of 4625 stocks from our Undiscovered Gems With Strong Fundamentals screener.

Let's explore several standout options from the results in the screener.

MedCap

Simply Wall St Value Rating: ★★★★★★

Overview: MedCap AB (publ) is a private equity firm focusing on investments in secondary direct, later stage, industry consolidation, add-on acquisitions, growth capital, middle market, mature companies, turnarounds and buyouts with a market cap of SEK8.78 billion.

Operations: MedCap generates revenue from three primary segments: Support (SEK733.70 million), Specialist Drugs (SEK453.10 million), and Medicine Engineering (SEK602.50 million).

MedCap, a dynamic player in the life sciences sector, has been making waves with its robust financial performance. Earnings surged by 51.7% over the past year, outpacing the industry growth of 36%. The company boasts a healthy balance sheet with more cash than its total debt and has significantly reduced its debt-to-equity ratio from 40.9% to 6.3% over five years. Its price-to-earnings ratio of 38.5x is attractive compared to the industry average of 50.4x, suggesting potential undervaluation in this space. Recent figures show net income for Q3 at SEK 52.9 million, up from SEK 38.3 million last year, highlighting strong earnings momentum.

OM:MCAP Debt to Equity as at Dec 2024
OM:MCAP Debt to Equity as at Dec 2024

Dynamic Holdings

Simply Wall St Value Rating: ★★★★★★

Overview: Dynamic Holdings Limited is an investment holding company focused on property investment and development in the People’s Republic of China and Hong Kong, with a market capitalization of approximately HK$2.06 billion.