Uncovering Hidden Gems: Gelsenwasser AG and Two More Small Cap Opportunities

As an investor, you're always on the lookout for undervalued stocks that can provide significant returns. Today, I want to highlight three small-cap opportunities that might have flown under your radar: Gelsenwasser AG, Athens Water Supply & Sewerage S.A (EYDAP), and Compagnie des Eaux de Royan (MLEDR). Let's dive into each of these hidden gems and explore why they could be attractive investments.

1. Gelsenwasser AG (WWG.F): A Hidden Gem in the Water Utilities Sector
Gelsenwasser AG, with a market capitalization of €1.80 billion, is a small-cap water utility company based in Germany. The company provides water, natural gas, electricity, and local co-generation services to households, municipal distributors, and industries in the Ruhr, Muensterland, lower Rhein, and Eastern Westphalia regions.



Gelsenwasser AG's strong dividend yield of 3.96% and stable financial performance make it an attractive investment opportunity. The company's revenue of €2.96 billion and net income of €127.3 million in the last 12 months demonstrate its profitability, while its current ratio of 0.98 and net cash position of €17.9 million indicate a healthy liquidity position.

However, Gelsenwasser AG's revenue decreased by -69.60% in 2023 compared to the previous year, which could be a cause for concern. To better understand this decline, it's essential to consider the company's specific business environment and regulatory landscape.



2. Athens Water Supply & Sewerage S.A (EYDAP): A Greek Water Utility with Strong Financials
EYDAP, with a market capitalization of €1.15 billion, is a Greek water utility company that operates in the water supply, sewerage, and wastewater treatment sectors. The company's strong financial performance, with a profit margin of 11.4% and a free cash flow margin of 14.3% in 2021, makes it an attractive investment opportunity.

EYDAP's revenue of €377.5 million in 2021, with a year-over-year increase of 1.7%, demonstrates the company's growth potential. Additionally, EYDAP's low debt levels and strong cash flow generation make it a financially stable investment option.



3. Compagnie des Eaux de Royan (MLEDR): A French Water Utility with a Strong Dividend Yield
MLEDR, with a market capitalization of €240 million, is a French water utility company that operates in the purification and distribution of drinking water for households, municipal distributors, and industries. The company's strong dividend yield of 4.23% and stable financial performance make it an attractive investment opportunity.

MLEDR's revenue of €105.2 million in 2021, with a year-over-year increase of 2.5%, demonstrates the company's growth potential. Additionally, MLEDR's low debt levels and strong cash flow generation make it a financially stable investment option.



In conclusion, Gelsenwasser AG, EYDAP, and MLEDR are three small-cap water utility companies with attractive investment opportunities. Their strong financial performance, stable cash flow generation, and solid dividend yields make them compelling investment options for those looking to diversify their portfolios with undervalued stocks in the water utilities sector. However, it's essential to conduct thorough research and consider other aspects, such as the companies' specific business environments and regulatory landscapes, before making an investment decision.