Most Gulf markets have recently extended their gains, buoyed by temporary U.S. tariff relief, though global trade uncertainties continue to loom large. In this context, investing in penny stocks — a term that may seem outdated but remains relevant — can still offer intriguing opportunities for growth, particularly in smaller or emerging companies. By focusing on those with strong financial health and potential for stability and upside, investors can discover promising prospects among these often-overlooked stocks.

Top 10 Penny Stocks In The Middle East

Click here to see the full list of 98 stocks from our Middle Eastern Penny Stocks screener.

Let's dive into some prime choices out of the screener.

Tukas Gida Sanayi ve Ticaret

Simply Wall St Financial Health Rating: ★★★★☆☆

Overview: Tukas Gida Sanayi ve Ticaret A.S. manufactures and sells food products both in Turkey and internationally, with a market capitalization of TRY9.81 billion.

Operations: The company generates revenue primarily from its food processing segment, which amounts to TRY6.84 billion.

Market Cap: TRY9.81B

Tukas Gida Sanayi ve Ticaret A.S. has demonstrated a reduction in its debt to equity ratio from 129.6% to 28.8% over five years, suggesting improved financial stability. However, earnings growth has been negative recently, with net profit margins declining from 17.9% to 11.4%. The company's price-to-earnings ratio of 12.6x is below the Turkish market average, indicating potential undervaluation despite low return on equity at 6.9%. While short-term assets comfortably cover liabilities and the board is experienced with an average tenure of over ten years, operating cash flow remains negative and interest coverage is insufficient at 2.9x EBIT.

• Dive into the specifics of Tukas Gida Sanayi ve Ticaret here with our thorough balance sheet health report.
• Evaluate Tukas Gida Sanayi ve Ticaret's historical performance by accessing our past performance report.

Alinma Retail REIT Fund

Simply Wall St Financial Health Rating: ★★★★☆☆

Overview: Alinma Retail REIT Fund is a real estate investment fund with a market cap of SAR534.54 million.

Operations: The fund generates revenue primarily from its real estate rental activities, amounting to SAR187.74 million.

Market Cap: SAR534.54M

Alinma Retail REIT Fund, with a market cap of SAR534.54 million, has shown financial improvement by becoming profitable over the past year and reporting net income of SAR8.13 million for 2024, compared to a loss the previous year. Revenue increased significantly to SAR187.74 million from SAR51.63 million year-on-year, driven by real estate rental activities. The fund's debt is well covered by operating cash flow at 31.3%, although short-term assets do not cover long-term liabilities of SAR263.3 million fully. Despite low return on equity at 1%, it trades below estimated fair value and maintains dividend distributions totaling SAR0.32 per unit annually.

• Unlock comprehensive insights into our analysis of Alinma Retail REIT Fund stock in this financial health report.
• Examine Alinma Retail REIT Fund's past performance report to understand how it has performed in prior years.

Oil Refineries

Simply Wall St Financial Health Rating: ★★★★★☆

Overview: Oil Refineries Ltd. operates in the production and sale of fuel products, intermediate materials, and aromatic products both in Israel and internationally, with a market cap of ₪2.87 billion.

Operations: The company generates revenue from its segments, with $6.73 billion coming from refining and $806 million from polymers.

Market Cap: ₪2.87B

Oil Refineries Ltd., with a market cap of ₪2.87 billion, recently reported a decline in sales to US$7.54 billion and net income to US$113 million for 2024, reflecting challenges in profitability as profit margins dropped from 4.9% to 1.5%. Despite this, the company maintains strong liquidity with short-term assets exceeding both short- and long-term liabilities. Its debt management has improved significantly over five years, reducing the debt-to-equity ratio from over 100% to a satisfactory level of 22.2%. However, dividend sustainability is questionable due to insufficient earnings coverage, and interest payments are not well covered by EBIT.

• Get an in-depth perspective on Oil Refineries' performance by reading our balance sheet health report here.
• Explore historical data to track Oil Refineries' performance over time in our past results report.

Summing It All Up

• Reveal the 98 hidden gems among our Middle Eastern Penny Stocks screener with a single click here.
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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 IBSE:TUKAS SASE:4345 and TASE:ORL.

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