In the ever-evolving stock market landscape, some companies manage to outshine their peers in terms of growth and performance but remain undervalued. These localized inefficiencies within the global stock market create opportunities for savvy investors equipped with the proper knowledge and powerful tools to perform strategic stock picking, yielding significant returns. Prometeus allows you to leverage big data and advanced stock analysis to identify and exploit these inefficiencies, ultimately translating into savvy investment decisions.
In particular, we first used the Stock Screener to reveal those few stocks out of more than 34.000 that are currently undervalued relative to their industry (i.e. a lower P/E ratio), with increasing revenue and earnings CAGR (i.e. a Compound Annual Growth Rate which has been increasing in 3,5 and 7 years) and excellent use of their assets to generate a return (i.e. Return On Assets better than peers). Then, we performed a deep dive into the Stock Screener results to find the best hidden gems out there.
Three such hidden gems that have recently exhibited remarkable growth while being underestimated compared to their counterparts are Mueller Industries Inc (MLI.US), Amdocs Ltd (DOX.US), and Tsurumi Manufacturing (6351.TSE).
Mueller Industries Inc - MLI.US
Mueller Industries Inc (MLI.US), an American company operating in the Metal Fabrication industry that manufactures and sells copper, brass, aluminum, and plastic products worldwide, has experienced significant recent growth in both revenue and earnings, leading to a corresponding uptrend in its stock price. Despite this, the company still appears undervalued compared to its peers suggested by Prometeus, and even regional and international peers. Impressively, Mueller Industries maintained a strong Profit Margin even during the challenges posed by the COVID-19 pandemic, showcasing resilience. The company boasts an excellent balance sheet, with decreasing liabilities attributed to a reduction in long-term debt. Furthermore, its Current Ratio comfortably exceeds both the industry average and the threshold value of 1.0. It also distributes a dividend of approximately 2%.
Amdocs Ltd - DOX.US
Amdocs Ltd (DOX.US), a tech company belonging to the Software-Infrastructure industry that operates in cloud developing, has exhibited strong, robust, and sustained revenue growth, which has been increasing over time although it is lower than its peers' growth average. The Profit Margin consistently managed to remain well above the peers' average since 2005, indicating a strong and efficient operational performance.
Amdocs Ltd demonstrates prudent financial management with an overall low debt - most concentrated in the long term - resulting in an impressive Debt/Equity ratio.
The company's commitment to shareholder value is evident through its dividend payout, currently standing at around 2.5%, exhibiting both growth and outperformance compared to the industry average.
Despite its great fundamental metrics and a consistent increase in stock price since 2009, Amdocs Ltd still maintains a lower Price/Earnings (P/E) ratio compared to its industry peers, suggesting potential for further appreciation in its stock value. This undervaluation presents an intriguing investment opportunity for those seeking strong fundamentals and growth potential in the technology sector.
Tsurumi Manufacturing - 6351.TSE
Tsurumi Manufacturing Co Ltd (6351.TSE), a Japanese company that produces, purchases, imports, exports, sells, and leases submersible pumps worldwide, stands out with a robust and long-established business, founded in Osaka in 1924. The company has seen sustained growth in Revenue since 2009/2010, after a moderate decrease in sales occurred during the 2007-2008 financial crisis, as well as in its Profit Margin which has been outperforming both the international industry average and Tsurumi's specific peers' average for some years.
Although long-term debt increased greatly in 2022, it remains comparatively low related to equity, as it appears in Tsurumi's very low Debt-To-Equity ratio compared both to its specific peers and the whole industry. The Current Ratio has been increasing over time and surpassing the peers' average. Despite a significant price surge in 2023, the stock remains undervalued compared to industry averages, making Tsurumi Manufacturing an enticing prospect for investors seeking long-term stability and growth.
