Three Undiscovered Gems In The Australian Stock Market

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Over the last 7 days, the Australian stock market has risen 1.4%, and over the past 12 months, it is up 15%. In light of this positive momentum and expected earnings growth of 12% per annum over the next few years, identifying stocks with strong fundamentals and growth potential can be particularly rewarding.

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%

★★★★★★

SKS Technologies Group

NA

34.65%

47.39%

★★★★★★

Red Hill Minerals

NA

104.58%

36.82%

★★★★★★

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 56 stocks from our ASX Undiscovered Gems With Strong Fundamentals screener.

We'll examine a selection from our screener results.

DroneShield

Simply Wall St Value Rating: ★★★★★★

Overview: DroneShield Limited develops, commercializes, and sells hardware and software technology for drone detection and security in Australia and the United States, with a market cap of A$1.07 billion.

Operations: DroneShield Limited generates revenue primarily from its Aerospace & Defense segment, amounting to A$67.52 million. The company's market cap stands at approximately A$1.07 billion.

DroneShield, a promising player in the defense sector, has shown impressive growth with earnings surging 612.7% over the past year. Despite being debt-free now, it had a debt-to-equity ratio of 41.5% five years ago. Recent half-year sales reached A$23.99 million, up from A$11.55 million last year, though net loss increased to A$4.8 million from A$2.94 million previously reported losses per share at A$.0078 compared to A$.006 last year indicate some challenges ahead

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

Emerald Resources

Simply Wall St Value Rating: ★★★★★☆

Overview: Emerald Resources NL focuses on the exploration and development of mineral reserves in Cambodia and Australia, with a market cap of A$2.58 billion.

Operations: Emerald Resources NL generates revenue primarily from mine operations, amounting to A$366.04 million.

Emerald Resources has been making waves with a 41.9% earnings growth over the past year, far outpacing the Metals and Mining industry’s -0.3%. Trading at 58.8% below its estimated fair value, it offers significant upside potential. The company reported A$371 million in sales for FY2024, up from A$299 million last year, with net income rising to A$84 million from A$59 million. Despite a debt-to-equity ratio increase to 8.5%, interest payments are well-covered by EBIT (18.6x).