Unveiling Hidden Gems: Y.D. More Investments and 2 Other Small-Cap Stocks with Strong Fundamentals

As the global markets experienced moderate gains in the final weeks of 2024, investors sought promising small-cap stocks with solid fundamentals. In this dynamic market landscape, we explore Y.D. More Investments Ltd (MRIN:TLV) and two other hidden gems that have shown resilience amidst fluctuating economic conditions.

Y.D. More Investments Ltd (MRIN:TLV) is a publicly owned investment manager based in Ramat Gan, Israel, with a market capitalization of ₪1.06 billion. The company manages investment portfolios, private investment funds, mutual funds, pension funds, provident funds, and other alternative investment platforms for clients. Y.D. More Investments has demonstrated impressive earnings growth of 16.7% over the past year, surpassing the industry's average growth rate of 12.8%. The company's debt-to-equity ratio has climbed significantly from 2.2% to 69.3% over five years, indicating increased leverage. However, interest payments are well covered by EBIT at a robust 46.9x coverage. In the third quarter of 2024, Y.D. More Investments reported revenue of ILS 212 million and net income of ILS 28 million, up from ILS 165 million and ILS 19 million respectively last year.

Matrix IT Ltd (TASE:MTRX) is a notable player in the tech sector, with a market capitalization of ₪5.43 billion. The company generates revenue primarily from Information Technology Solutions and Services in Israel and Cloud and Computing Infrastructure. Matrix IT has shown robust financial health with its debt to equity ratio improving from 116.2% to 73.8% over five years, and interest payments comfortably covered by EBIT at 11.1 times. Despite earnings growth of 17.3% not outpacing the industry average of 17.9%, it remains a solid performer with high-quality earnings and consistent profitability, boasting an annual earnings increase of 11.3%. Recent quarterly results reveal sales climbing to ILS 1,418 million from ILS 1,334 million year-on-year and net income rising to ILS 64 million from ILS 51 million previously.



JCU Corporation (TSE:4975) operates in Japan, producing and selling chemicals, machines, and auxiliary equipment for surface treatment. With a market capitalization of ¥97.01 billion, JCU has shown robust financial health with earnings growing by 39% last year, outpacing the chemicals industry average of 14%. The company is trading at a significant discount to its estimated fair value by about 53%, suggesting potential undervaluation. Over the past five years, JCU's debt-to-equity ratio has impressively decreased from 6.4% to just 1%, indicating a significant improvement in financial health.

In conclusion, Y.D. More Investments Ltd, Matrix IT Ltd, and JCU Corporation have demonstrated strong fundamentals and resilience amidst fluctuating economic conditions. As investors seek promising small-cap stocks, these companies offer attractive opportunities for growth and value. By closely monitoring their financial performance and market developments, investors can capitalize on the potential of these hidden gems in the dynamic market landscape.