The Australian market has been flat over the last week, but it has risen 7.8% over the past 12 months with earnings forecast to grow by 13% annually. In light of these conditions, identifying promising small-cap stocks that exhibit strong growth potential and solid fundamentals can be particularly rewarding for investors.

Top 10 Undiscovered Gems With Strong Fundamentals In Australia

Click here to see the full list of 52 stocks from our ASX Undiscovered Gems With Strong Fundamentals screener.

Let's dive into some prime choices out of from the screener.

Austin Engineering

Simply Wall St Value Rating: ★★★★★☆

Overview: Austin Engineering Limited (ASX:ANG) manufactures, repairs, overhauls, and supplies mining attachment products and other related services for industrial and resources-related sectors with a market cap of A$390.06 million.

Operations: Revenue for Austin Engineering Limited is derived primarily from the Asia-Pacific region (A$154.13 million), followed by North America (A$84.62 million) and South America (A$48.99 million).

Austin Engineering, a small-cap Australian company, has shown impressive earnings growth of 41.5% over the past year, outpacing the Machinery industry’s 30.7%. The firm boasts a satisfactory net debt to equity ratio of 15.5%, and its interest payments are well covered by EBIT at 6.6x coverage. Trading at a price-to-earnings ratio of 18.7x, it appears attractively valued compared to the broader Australian market's 19.1x P/E ratio.

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

• Learn about Austin Engineering's historical performance.

Supply Network

Simply Wall St Value Rating: ★★★★★★

Overview: Supply Network Limited (ASX:SNL) supplies aftermarket parts to the commercial vehicle industry in Australia and New Zealand, with a market cap of A$1.02 billion.

Operations: The company generated A$278.41 million in revenue from supplying aftermarket parts to the commercial vehicle market in Australia and New Zealand.

Supply Network has seen its debt to equity ratio fall from 18.1% to 12.9% over the past five years, reflecting prudent financial management. The company's net debt to equity ratio stands at a satisfactory 6%, and its interest payments are well covered by EBIT (23x). Notably, earnings grew by 27.9% last year, outpacing the Retail Distributors industry’s growth of 2.7%. Despite shareholder dilution in the past year, future earnings are forecasted to grow at an annual rate of nearly 14%.

• Dive into the specifics of Supply Network here with our thorough health report.

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

United Overseas Australia

Simply Wall St Value Rating: ★★★★★☆

Overview: United Overseas Australia Ltd, with a market cap of A$942.39 million, operates in the development and resale of land and buildings across Malaysia, Singapore, Vietnam, and Australia.

Operations: United Overseas Australia's primary revenue stream comes from land development and resale, generating A$219.34 million, while its investment segment contributes A$650.20 million.

United Overseas Australia (UOS) has shown notable financial resilience, with earnings growth of 18.5% over the past year, outperforming the Real Estate industry's -10.6%. Trading at 44.7% below its estimated fair value, UOS appears undervalued. Despite a rise in debt to equity ratio from 5.8% to 9.6% over five years, the company remains profitable and has more cash than total debt. A significant one-off gain of A$31M impacted recent results positively.

• Navigate through the intricacies of United Overseas Australia with our comprehensive health report here.

• Gain insights into United Overseas Australia's historical performance by reviewing our past performance report.

Taking Advantage

• Embark on your investment journey to our 52 ASX Undiscovered Gems With Strong Fundamentals selection 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.

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Searching for a Fresh Perspective?

• 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.

Companies discussed in this article include ASX:ANG ASX:SNL and ASX:UOS.

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