Over the last 7 days, the market has risen 4.9%. In the last year, the market has climbed 26%. Earnings are expected to grow by 15% per annum over the next few years. Given this robust performance, identifying stocks with strong fundamentals and growth potential can be particularly rewarding.

Top 10 Undiscovered Gems With Strong Fundamentals In The United States

Click here to see the full list of 223 stocks from our US Undiscovered Gems With Strong Fundamentals screener.

We're going to check out a few of the best picks from our screener tool.

Merchants Bancorp

Simply Wall St Value Rating: ★★★★★☆

Overview: Merchants Bancorp is a diversified bank holding company in the United States with a market cap of approximately $1.99 billion.

Operations: Merchants Bancorp generates revenue primarily from Banking ($324.39 million), Mortgage Warehousing ($132.25 million), and Multi-Family Mortgage Banking ($155.67 million) segments.

Merchants Bancorp, with total assets of US$18.2 billion and equity of US$1.9 billion, showcases a robust financial foundation. Total deposits stand at US$14.9 billion while loans amount to US$10.9 billion, yielding a net interest margin of 3.1%. Despite an insufficient allowance for bad loans at 1.3%, earnings grew by 40.6% last year, outperforming the industry average of 12.5%. The company repurchased shares in the past year and trades at good value compared to peers and industry standards.

• Click here and access our complete health analysis report to understand the dynamics of Merchants Bancorp.

• Review our historical performance report to gain insights into Merchants Bancorp's's past performance.

Lifeway Foods

Simply Wall St Value Rating: ★★★★★★

Overview: Lifeway Foods, Inc. produces and markets probiotic-based products in the United States and internationally, with a market cap of $275.40 million.

Operations: Lifeway Foods generates revenue primarily from its cultured dairy products, amounting to $176.78 million. The company's net profit margin stands at 5.2%.

Lifeway Foods has shown impressive earnings growth of 139.1% over the past year, outperforming the food industry’s 0.2%. The company reported Q2 sales of US$49.16 million, up from US$39.23 million last year, with net income rising to US$3.78 million from US$3.16 million a year ago. Despite significant insider selling recently, Lifeway is debt-free and trading at 56.5% below its estimated fair value, making it an intriguing prospect in the market.

• Take a closer look at Lifeway Foods' potential here in our health report.

• Explore historical data to track Lifeway Foods' performance over time in our Past section.

Valhi

Simply Wall St Value Rating: ★★★★★☆

Overview: Valhi, Inc. operates in the chemicals, component products, and real estate management and development sectors across Europe, North America, the Asia Pacific, and internationally with a market cap of $695.20 million.

Operations: Valhi generates revenue primarily from its chemicals segment ($1.78 billion), followed by component products ($157.40 million) and real estate management and development ($78.50 million). The company's net profit margin is a key metric to consider when evaluating its financial performance.

Valhi, Inc. has shown impressive earnings growth of 215.4% over the past year, significantly outpacing the Chemicals industry's -4.8%. The company's debt to equity ratio improved from 78% to 38.7% in five years, with net debt to equity at a satisfactory 8.6%. Recent financial results for Q2 saw sales rise to US$559.7 million from US$507.1 million last year, and net income reached US$19.9 million compared to a loss of US$3.2 million previously.

• Navigate through the intricacies of Valhi with our comprehensive health report here.

• Examine Valhi's past performance report to understand how it has performed in the past.

Next Steps

• Embark on your investment journey to our 223 US Undiscovered Gems With Strong Fundamentals selection here.

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Contemplating Other Strategies?

• 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 NasdaqCM:MBIN NasdaqGM:LWAY and NYSE:VHI.

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