In recent weeks, global markets have shown mixed performance, with U.S. stocks closing higher and the S&P MidCap 400 posting its first weekly gain since January. Amid this backdrop of cautious optimism and economic uncertainty, small-cap stocks present intriguing opportunities for investors seeking potential growth in undervalued segments of the market. Identifying a good stock often involves looking at companies with solid fundamentals and notable insider activity, as these factors can signal confidence from those closest to the business operations.
Top 10 Undervalued Small Caps With Insider Buying Globally
| Name | PE | PS | Discount to Fair Value | Value Rating |
|---|---|---|---|---|
| Nexus Industrial REIT | 5.4x | 2.8x | 25.79% | ★★★★★★ |
| Hong Leong Asia | 9.2x | 0.2x | 44.67% | ★★★★★☆ |
| Bytes Technology Group | 22.9x | 5.8x | 10.12% | ★★★★★☆ |
| Macfarlane Group | 10.7x | 0.6x | 39.18% | ★★★★★☆ |
| Robert Walters | NA | 0.2x | 48.30% | ★★★★★☆ |
| Minto Apartment Real Estate Investment Trust | 8.5x | 3.4x | 21.22% | ★★★★★☆ |
| Savills | 25.1x | 0.6x | 36.03% | ★★★★☆☆ |
| Sing Investments & Finance | 7.2x | 3.7x | 36.49% | ★★★★☆☆ |
| Saturn Oil & Gas | 7.3x | 0.5x | -41.81% | ★★★★☆☆ |
| FRP Advisory Group | 12.5x | 2.2x | 8.59% | ★★★☆☆☆ |
Underneath we present a selection of stocks filtered out by our screen.
Charter Hall Retail REIT (ASX:CQR)
Simply Wall St Value Rating: ★★★★☆☆
Overview: Charter Hall Retail REIT is an Australian real estate investment trust that focuses on investing in and managing a portfolio of convenience-based retail properties, with a market capitalization of A$2.46 billion.
Operations: Charter Hall Retail REIT generates revenue primarily from its Convenience Shopping Centre Retail and Convenience Net Lease Retail segments. The company's gross profit margin has shown variation, reaching 81.58% in September 2021 before declining to 61.49% by December 2023. Operating expenses have increased over time, while non-operating expenses have fluctuated significantly, impacting net income margins which turned negative in recent periods.
PE: 12.4x
Charter Hall Retail REIT, a smaller player in the real estate sector, has recently reaffirmed its fiscal year 2025 distribution and earnings guidance at 24.7 cents and approximately 25.4 cents per unit, respectively. Despite a decrease in sales to A$95.5 million for the half-year ending December 31, 2024, revenue surged to A$193 million from A$149.5 million previously, with net income hitting A$108.6 million versus a prior loss of A$42.1 million. The company faces challenges with high-risk funding reliant on external borrowing and forecasts indicate an average annual earnings decline of 0.1% over three years; however, insider confidence is evident through share purchases made between January and February 2025 by key stakeholders who believe in its potential despite these hurdles.
Centerra Gold (TSX:CG)
Simply Wall St Value Rating: ★★★★★☆
Overview: Centerra Gold is a mining company engaged in the exploration, development, and operation of gold and copper properties, with a market cap of approximately CAD 2.54 billion.
Operations: The company's revenue is primarily derived from its operations at Mount Milligan, Öksüt, and Molybdenum segments. Over recent periods, the net income margin has shown significant fluctuations, with a notable decline to -34.71% in Q2 2023 before recovering to 6.62% by Q1 2025. Operating expenses and cost of goods sold are substantial components impacting profitability across these periods.
PE: 16.6x
Centerra Gold, a company with a market capitalization under larger peers, recently showcased insider confidence through Paul Wright's purchase of 35,000 shares valued at approximately US$284,369. This activity suggests potential optimism about the company's future prospects. Despite facing challenges such as reliance on external borrowing for funding and one-off items affecting earnings quality, Centerra reported improved financials with US$1.21 billion in sales and a net income of US$80 million for 2024. The company anticipates gold production between 270,000 to 310,000 ounces in 2025 as operations stabilize post-shutdowns.
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Examine Centerra Gold's past performance report to understand how it has performed in the past.
Flagship Communities Real Estate Investment Trust (TSX:MHC.UN)
Simply Wall St Value Rating: ★★★★★☆
Overview: Flagship Communities Real Estate Investment Trust operates in the residential real estate sector, focusing on manufactured housing communities, with a market cap of approximately CA$0.54 billion.
Operations: Flagship Communities Real Estate Investment Trust generates revenue primarily from its residential real estate segment, with a recent figure of $88.13 million. The company has experienced fluctuations in gross profit margin, reaching 66.31% as of the latest data point. Operating expenses and non-operating expenses significantly impact net income, with a notable net income margin of 1.17%.
PE: 3.3x
Flagship Communities Real Estate Investment Trust, a smaller player in the real estate sector, has seen its revenue climb to US$88.13 million for 2024 from US$71.05 million the previous year, while net income rose to US$103.52 million from US$65.1 million. Despite this growth, earnings are projected to decline by 60% annually over the next three years due to reliance on external borrowing and insufficient interest coverage by earnings. The REIT consistently distributes monthly dividends of US$0.0517 per unit, equating to an annual yield of US$0.62 per unit for investors seeking income opportunities in potentially undervalued sectors.
Where To Now?
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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.
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