As global markets navigate a landscape marked by cautious Federal Reserve commentary and looming political uncertainties, smaller-cap indexes have faced significant challenges, underperforming their larger counterparts. Despite this backdrop, the search for undiscovered gems in the small-cap sector remains compelling as these stocks often offer unique growth potential that can thrive even amid broader market volatility. Identifying such opportunities requires a keen understanding of market dynamics and an eye for companies with strong fundamentals that may not yet be fully appreciated by the wider market.

Click here to see the full list of 4633 stocks from our Undiscovered Gems With Strong Fundamentals screener.

Underneath we present a selection of stocks filtered out by our screen.

Simply Wall St Value Rating: ★★★★☆☆

Overview: Societatea Energetica Electrica S.A. operates in Romania, focusing on the construction, operation, and maintenance of electricity distribution networks, with a market capitalization of RON4.35 billion.

Operations: Electrica generates revenue primarily from electricity and natural gas supply (RON9.86 billion) and electricity distribution (RON4.82 billion), with additional income from external electricity network maintenance (RON130.35 million).

Electrica, a notable player in Romania's energy sector, recently became profitable and is trading at 12.6% below its estimated fair value. Despite a high net debt to equity ratio of 65.6%, the company's interest payments are well covered by EBIT with a coverage of 3.4x, indicating solid financial management amidst industry challenges. Recent strategic moves include the formation of Electrica Esyasoft Smart Solutions S.A., focusing on smart grid technologies, which aligns with their innovative growth trajectory. However, sales and net income have dipped compared to last year, highlighting areas for potential improvement in operational efficiency and market positioning.