The Middle Eastern stock markets have recently faced challenges, with most Gulf bourses retreating amid geopolitical tensions between the U.S. and Iran, impacting investor sentiment and market indices. Despite these uncertainties, investors often look for opportunities in smaller or newer companies that can offer surprising value and potential growth. Penny stocks, though an outdated term, still represent a viable investment area; when backed by strong financials and solid fundamentals, they can provide upside potential while minimizing some risks typically associated with this category.

Here's a peek at a few of the choices from the screener.

Al Kathiri Holding (SASE:3008)

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

Overview: Al Kathiri Holding Company, with a market cap of SAR325.50 million, operates in the Kingdom of Saudi Arabia through its subsidiaries by producing and supplying ready-mix concrete products.

Operations: The company's revenue is primarily generated within Saudi Arabia, amounting to SAR249.64 million, with export activities contributing SAR0.61 million.

Market Cap: SAR325.5M

Al Kathiri Holding, with a market cap of SAR325.50 million, faces challenges typical of penny stocks. Despite generating SAR249.64 million in revenue primarily within Saudi Arabia, the company remains unprofitable with increasing losses over five years at 72.7% annually. Its debt to equity ratio has surged to 221.3%, indicating high leverage concerns, yet short-term assets exceed liabilities by SAR17.3 million, providing some financial cushion. Recent board restructuring aims to enhance governance and strategic planning capabilities but doesn't immediately address profitability issues highlighted by a net loss of SAR13.82 million in Q1 2026 compared to previous periods.

InterCure (TASE:INCR)

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

Overview: InterCure Ltd. operates in the production, manufacturing, and distribution of pharmaceutical-grade cannabis and cannabis-based products for medical use both in Israel and internationally, with a market cap of ₪163.93 million.

Operations: The company generates revenue primarily from its Cannabis Segment, totaling ₪270.2 million.

Market Cap: ₪163.93M

InterCure Ltd., with a market cap of ₪163.93 million, operates in the cannabis industry and reported revenue of ₪270.2 million for 2025, showing growth from the previous year despite a net loss of ₪35.71 million. The company maintains a satisfactory net debt to equity ratio of 28.4%, though its share price remains highly volatile and is trading significantly below estimated fair value. InterCure's recent private placement aims to raise ILS 21.71 million, supported by key shareholders and pharma-focused hedge funds, potentially strengthening its financial position amid ongoing unprofitability challenges and increased debt levels over five years.

Shure-Tech Investments - Limited Partnership (TASE:STEC)

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

Overview: Shure-Tech Investments - Limited Partnership operates in the investment sector within Israel, with a market capitalization of ₪6.58 million.

Operations: The company generates revenue solely from its Asset Management segment, which reported a negative revenue of -₪21.55 million.

Market Cap: ₪6.58M

Shure-Tech Investments - Limited Partnership, with a market cap of ₪6.58 million, operates in Israel's investment sector and is currently pre-revenue, generating less than US$1 million. Despite its unprofitability and negative revenue of -₪21.55 million from asset management, the company benefits from being debt-free with short-term assets (₪8.9M) exceeding both short-term (₪803K) and long-term liabilities (₪504K). Shareholders have not faced dilution recently, although the stock experiences high volatility with a weekly rate of 11%, surpassing most Israeli stocks. The board is considered experienced with an average tenure of 3.1 years.

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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.