Undervalued Small Caps With Insider Buying On UK Exchange For January 2025

The United Kingdom's stock market has recently faced challenges, with the FTSE 100 and FTSE 250 indices experiencing declines amid weak trade data from China, highlighting concerns about global economic recovery. As these broader market pressures persist, investors may find opportunities in small-cap stocks on the UK exchange that demonstrate resilience through insider buying, suggesting confidence in their potential despite current economic headwinds.

Top 10 Undervalued Small Caps With Insider Buying In The United Kingdom

Name	PE	PS	Discount to Fair Value	Value Rating
NCC Group	NA	1.3x	28.50%	★★★★★★
4imprint Group	15.5x	1.3x	40.17%	★★★★★☆
Speedy Hire	NA	0.3x	33.93%	★★★★★☆
XPS Pensions Group	11.1x	3.2x	6.80%	★★★★☆☆
Robert Walters	35.7x	0.2x	28.68%	★★★★☆☆
Sabre Insurance Group	11.4x	1.5x	12.00%	★★★★☆☆
iomart Group	24.4x	0.7x	33.05%	★★★★☆☆
Telecom Plus	17.7x	0.7x	31.36%	★★★☆☆☆
Warpaint London	23.9x	4.2x	1.88%	★★★☆☆☆
THG	NA	0.3x	-509.22%	★★★☆☆☆

Click here to see the full list of 41 stocks from our Undervalued UK Small Caps With Insider Buying screener.

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

4imprint Group (LSE:FOUR)

Simply Wall St Value Rating: ★★★★★☆

Overview: 4imprint Group is a company that specializes in the direct marketing of promotional products, with significant operations in North America and a market capitalization of approximately $1.09 billion.

Operations: The company's primary revenue stream comes from North America, contributing significantly to its total revenue of $1.36 billion. The cost of goods sold (COGS) is a substantial part of expenses, amounting to $954.1 million, impacting the gross profit margin which stands at 29.77%. Operating expenses include notable allocations towards sales and marketing, which are recorded at $163.8 million. Net income has shown growth over time with a net income margin reaching 8.20%.

PE: 15.5x

4imprint Group, a smaller player in the UK market, is drawing attention with its projected annual earnings growth of 4.64%. Despite relying entirely on external borrowing for funding, which carries higher risk, there's insider confidence as insiders made share purchases over the past year. The company anticipates group revenue to reach $1.37 billion for 2024. With an upcoming fiscal report due on January 21, 2025, investors are keenly observing potential growth opportunities amidst these dynamics.

• Unlock comprehensive insights into our analysis of 4imprint Group stock in this valuation report.

• Learn about 4imprint Group's historical performance.

SThree (LSE:STEM)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: SThree is a global recruitment company specializing in STEM (Science, Technology, Engineering, and Mathematics) industries with operations across the USA, DACH region, Europe, Middle East & Asia, and the Netherlands (including Spain), and it has a market capitalization of £0.77 billion.

Operations: SThree generates revenue primarily from the DACH region, followed by the Netherlands (including Spain) and the USA. The company's cost of goods sold (COGS) has consistently increased over time, impacting its gross profit margin, which was 25.11% in May 2024. Operating expenses are a significant component of SThree's cost structure, with general and administrative expenses being a major part of it.

PE: 6.7x

SThree, a UK-based recruitment firm, is navigating volatility with its share price fluctuating significantly over the past three months. Despite this, insider confidence is evident as the company initiated a £20 million share repurchase program in December 2024 to reduce its share capital. However, potential investors should be cautious as earnings are forecasted to decline by an average of 37% annually over the next three years. The company's reliance on external borrowing adds financial risk.

• Dive into the specifics of SThree here with our thorough valuation report.

• Assess SThree's past performance with our detailed historical performance reports.

Vp (LSE:VP.)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Vp is a UK-based company specializing in equipment rental services with operations in the United Kingdom and internationally, boasting a market cap of £0.32 billion.

Operations: Vp generates revenue primarily from its UK operations, which contribute £339.21 million, and international activities adding £43.35 million. The company's gross profit margin has shown a notable increase, reaching 33.08% by September 2024 from earlier periods where it was lower. Operating expenses are a significant component of costs, with general and administrative expenses consistently appearing as a major line item in the financials.

PE: -43.7x

Vp's recent developments, such as the launch of Vp Rail, indicate a strategic focus on enhancing customer access and simplifying processes in the rail sector. Despite reporting stable earnings with sales at £192.46 million for H1 2024, insider confidence is evident through share purchases over the past year. The company maintains a consistent dividend policy with an interim payout of 11.5 pence per share. While high debt levels pose a risk due to reliance on external borrowing, projected earnings growth of 55% annually suggests potential for future value realization in this small UK stock.

• Take a closer look at Vp's potential here in our valuation report.

• Gain insights into Vp's historical performance by reviewing our past performance report.

Summing It All Up

• Navigate through the entire inventory of 41 Undervalued UK Small Caps With Insider Buying here.
• Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St's portfolio to get a 360-degree view on how they're shaping up.
• Simply Wall St is a revolutionary app designed for long-term stock investors, it's free and covers every market in the world.

Contemplating Other Strategies?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
• Find companies with promising cash flow potential yet trading below their fair value.

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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