Insider Buying Highlights Undervalued Small Caps In UK For December 2024

The United Kingdom market has remained flat over the past week but has seen a 7.8% increase over the past year, with earnings expected to grow by 15% annually in the coming years. In this context, identifying stocks that are potentially undervalued can be crucial, especially when there is notable insider buying activity suggesting confidence in their future prospects.

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

Name	PE	PS	Discount to Fair Value	Value Rating
Headlam Group	NA	0.2x	36.66%	★★★★★☆
Sabre Insurance Group	11.5x	1.5x	10.63%	★★★★☆☆
iomart Group	27.5x	0.7x	25.91%	★★★★☆☆
Optima Health	NA	1.2x	38.60%	★★★★☆☆
Dr. Martens	23.4x	0.9x	8.86%	★★★☆☆☆
Telecom Plus	18.8x	0.8x	27.20%	★★★☆☆☆
Treatt	20.0x	1.9x	47.27%	★★★☆☆☆
Gooch & Housego	38.6x	0.9x	35.75%	★★★☆☆☆
Reach	6.8x	0.5x	-136.80%	★★★☆☆☆
THG	NA	0.3x	-1021.15%	★★★☆☆☆

Click here to see the full list of 29 stocks from our Undervalued UK Small Caps With Insider Buying screener.

We'll examine a selection from our screener results.

Serica Energy (AIM:SQZ)

Simply Wall St Value Rating: ★★★★★☆

Overview: Serica Energy is an oil and gas company focused on the exploration, development, and production of energy resources, with a market cap of £1.13 billion.

Operations: The company's revenue primarily comes from oil and gas exploration, development, and production, with recent revenue figures reaching approximately $839.24 million. The gross profit margin has shown fluctuations, most recently recorded at 42.62%. Operating expenses have been a significant cost factor alongside non-operating expenses impacting net income margins, which were last noted at 13.60%.

PE: 5.4x

Serica Energy, a UK-based company in the energy sector, is navigating challenges and opportunities typical of smaller companies. Recent production guidance suggests output could reach 37,000 boe/d for 2024, although current operations are hampered by compressor issues at Triton FPSO. This has temporarily reduced production to around 28,000 boe/d. Despite these setbacks, insider confidence remains evident with share purchases reported earlier this year. Revenue growth is projected at 4.19% annually; however, earnings may decline by an average of 18.3% over the next three years due to reliance on external funding sources and operational vulnerabilities.

• Delve into the full analysis valuation report here for a deeper understanding of Serica Energy.

• Understand Serica Energy's track record by examining our Past report.

Gym Group (LSE:GYM)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Gym Group operates a chain of health and fitness facilities, providing high-quality services with a market capitalization of approximately £0.23 billion.

Operations: The company generates revenue primarily through its health and fitness facilities, with a recent figure of £216.3 million. The gross profit margin has shown a notable trend, reaching 98.66% as of the latest period. Operating expenses are significant, including general and administrative costs that have reached £133.6 million recently.

PE: -132.1x

Gym Group, a UK-based fitness chain, has seen insider confidence with recent share purchases signaling trust in its potential. The company reported H1 2024 sales of £112.1 million, up from £99.8 million the previous year, turning a net loss into a modest profit of £0.2 million. Despite relying on external borrowing for funding, the company raised its earnings guidance in September 2024 and anticipates significant growth in earnings over the next year.

• Get an in-depth perspective on Gym Group's performance by reading our valuation report here.

• Learn about Gym Group's historical performance.

Pinewood Technologies Group (LSE:PINE)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Pinewood Technologies Group is a company that specializes in software solutions, with operations focused on providing innovative technology services, and has a market cap of £1.25 billion.

Operations: Pinewood Technologies Group generates revenue primarily from software sales, amounting to £22.62 million. The company's gross profit margin has shown a notable increase, reaching 88.98% in the most recent period. Operating expenses are significant, with general and administrative expenses constituting a major portion at £10.89 million.

PE: 37.1x

Pinewood Technologies Group, a small company in the UK market, has shown insider confidence with CFO Ollie Mann purchasing 31,498 shares for £102,452. This move suggests belief in future growth potential despite recent earnings showing a drop to £5 million from £26.9 million last year. The company's new five-year contract with Marshall Motor Group highlights its expanding influence in the automotive sector. As it joins the S&P Global BMI Index, Pinewood's strategic positioning could drive future performance improvements.

• Click here to discover the nuances of Pinewood Technologies Group with our detailed analytical valuation report.

• Gain insights into Pinewood Technologies Group's historical performance by reviewing our past performance report.

Key Takeaways

• Reveal the 29 hidden gems among our Undervalued UK Small Caps With Insider Buying screener with a single click here.
• Already own these companies? Bring clarity to your investment decisions by linking up your portfolio with Simply Wall St, where you can monitor all the vital signs of your stocks effortlessly.
• Simply Wall St is a revolutionary app designed for long-term stock investors, it's free and covers every market in the world.

Looking For Alternative Opportunities?

• 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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