3 Undiscovered Gems In Australia To Enhance Your Portfolio

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As the Australian market faces a downturn with the ASX200 dipping by 0.9% to its lowest level since September, sectors like Financials and Health Care have been leading the decline, while Energy stands as the sole sector in positive territory. In this challenging environment, identifying undiscovered gems within small-cap stocks can offer unique opportunities for diversification and growth potential amid broader market volatility.

Top 10 Undiscovered Gems With Strong Fundamentals In Australia

Name

Debt To Equity

Revenue Growth

Earnings Growth

Health Rating

Fiducian Group

NA

9.94%

6.48%

★★★★★★

Sugar Terminals

NA

3.14%

3.53%

★★★★★★

Bisalloy Steel Group

0.95%

10.27%

24.14%

★★★★★★

Lycopodium

NA

17.22%

33.85%

★★★★★★

Red Hill Minerals

NA

75.05%

36.74%

★★★★★★

BSP Financial Group

7.53%

7.31%

4.10%

★★★★★☆

Steamships Trading

33.60%

4.17%

3.90%

★★★★★☆

AMCIL

NA

5.16%

5.31%

★★★★★☆

Hearts and Minds Investments

1.00%

18.81%

20.95%

★★★★☆☆

A2B Australia

15.83%

-7.78%

25.44%

★★★★☆☆

Click here to see the full list of 54 stocks from our ASX Undiscovered Gems With Strong Fundamentals screener.

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

DroneShield

Simply Wall St Value Rating: ★★★★★★

Overview: DroneShield Limited focuses on developing and commercializing hardware and software technology for drone detection and security in Australia and the United States, with a market cap of A$797.99 million.

Operations: DroneShield Limited's revenue is primarily derived from its Aerospace & Defense segment, amounting to A$67.52 million.

DroneShield, a nimble player in the Aerospace & Defense sector, has seen its earnings skyrocket by 612% over the past year, outpacing industry growth of 14%. Despite reporting a net loss of A$4.8 million for the half-year ending June 2024, sales nearly doubled to A$23.99 million from A$11.55 million previously. The company operates debt-free and trades at approximately 74% below its estimated fair value, suggesting potential undervaluation. Recent board appointments bring strategic expertise that could bolster future performance as DroneShield continues to navigate its position within key market indices like the S&P/ASX Small Ordinaries Index.

ASX:DRO Debt to Equity as at Nov 2024
ASX:DRO Debt to Equity as at Nov 2024

Navigator Global Investments

Simply Wall St Value Rating: ★★★★★☆

Overview: Navigator Global Investments (ASX:NGI) is a fund management company based in Australia with a market cap of A$828.23 million.

Operations: Navigator Global Investments generates revenue primarily from its Lighthouse segment, amounting to $95.93 million. The company has a market capitalization of A$828.23 million.