Undervalued Small Caps With Insider Action On UK Radar February 2025

The United Kingdom's market has recently faced challenges, with the FTSE 100 and FTSE 250 indices experiencing declines due to weak trade data from China, highlighting the global interconnectedness of economic fortunes. As broader market sentiment remains cautious amidst these conditions, investors often seek opportunities in small-cap stocks that may offer potential value through strategic insider actions and resilience to external pressures.

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

Name	PE	PS	Discount to Fair Value	Value Rating
Warpaint London	18.6x	3.2x	32.84%	★★★★★☆
Bytes Technology Group	20.4x	5.2x	19.77%	★★★★★☆
Stelrad Group	11.6x	0.6x	19.70%	★★★★★☆
4imprint Group	16.9x	1.4x	33.49%	★★★★★☆
Speedy Hire	NA	0.2x	26.57%	★★★★★☆
NCC Group	NA	1.2x	25.78%	★★★★★☆
Gamma Communications	22.2x	2.3x	36.25%	★★★★☆☆
Franchise Brands	39.5x	2.0x	24.46%	★★★★☆☆
CVS Group	28.6x	1.2x	38.77%	★★★★☆☆
Optima Health	NA	1.5x	45.22%	★★★★☆☆

Click here to see the full list of 35 stocks from our Undervalued UK Small Caps With Insider Buying screener.

We'll examine a selection from our screener results.

Hollywood Bowl Group (LSE:BOWL)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Hollywood Bowl Group operates a chain of ten-pin bowling centers across the UK, focusing on providing family-friendly entertainment experiences, with a market capitalization of approximately £0.65 billion.

Operations: The company generates revenue primarily from recreational activities, with recent figures reaching £230.40 million. Its cost of goods sold (COGS) has been increasing, impacting the gross profit margin which recently stood at 63.15%. Operating expenses are a significant part of its cost structure, with general and administrative expenses being a major component. The net income margin was recorded at 12.98% as of the latest period available.

PE: 15.6x

Hollywood Bowl Group, a UK-based company, has been gaining attention in the small-cap sector. Despite its reliance on higher-risk external borrowing for funding, it forecasts an 11.25% annual earnings growth. Recently, they initiated a share repurchase program authorized to buy back up to 17 million shares by March 2026. With sales of £230 million for FY2024 and net income slightly declining to £29.91 million from the previous year, insider confidence remains evident through strategic financial maneuvers amidst market challenges.

• Take a closer look at Hollywood Bowl Group's potential here in our valuation report.

• Review our historical performance report to gain insights into Hollywood Bowl Group's's past performance.

Bytes Technology Group (LSE:BYIT)

Simply Wall St Value Rating: ★★★★★☆

Overview: Bytes Technology Group is an IT solutions provider with a focus on software licensing, cloud services, and security products, operating with a market cap of approximately £1.10 billion.

Operations: The company generates revenue primarily as an IT solutions provider, with recent figures showing revenue of £203.79 million and a net income of £51.91 million. Over time, the gross profit margin has shown significant growth, reaching 74.86% in the latest period from 13.53% in early periods observed. Operating expenses have consistently increased alongside revenues, impacting overall profitability trends.

PE: 20.4x

Bytes Technology Group, a small cap in the UK market, is gaining attention as an undervalued stock. Insider confidence is evident with recent share purchases by key figures over the past year. Despite relying on external borrowing for funding, which carries higher risk compared to customer deposits, the company shows promise with earnings expected to grow 7% annually. Their involvement in AI and infrastructure trends alongside Microsoft highlights their strategic positioning for future growth within the tech sector.

• Dive into the specifics of Bytes Technology Group here with our thorough valuation report.

• Explore historical data to track Bytes Technology Group's performance over time in our Past section.

Georgia Capital (LSE:CGEO)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Georgia Capital is an investment company focused on acquiring and developing businesses in Georgia, with a market capitalization of approximately £0.29 billion.

Operations: Georgia Capital's revenue streams have shown fluctuations, with notable periods of high gross profit margins reaching up to 1.0%. Operating expenses are consistently low, often below GEL 10 million, contributing to varying net income outcomes. The company has experienced significant swings in net income margin, including a peak at 2.81% and negative figures in certain quarters.

PE: 4.8x

Georgia Capital, a smaller company in the UK market, faces challenges with earnings declining 0.9% annually over five years. Recent financials show a drop in revenue to GEL 368.1 million and net income to GEL 362.27 million for 2024 compared to the previous year. Despite this, insider confidence is evident with share repurchases authorized up to $25 million starting December 2024, aiming to reduce share capital by June 2025 or their next AGM.

• Click here to discover the nuances of Georgia Capital with our detailed analytical valuation report.

• Understand Georgia Capital's track record by examining our Past report.

Where To Now?

• Unlock our comprehensive list of 35 Undervalued UK Small Caps With Insider Buying by clicking here.
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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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