Undervalued Small Caps With Insider Buying To Watch In August 2024

As global markets react positively to the Federal Reserve's announcement of impending rate cuts, small-cap stocks have been outperforming their larger counterparts, with indices like the S&P 600 showing notable gains. This environment presents an opportune moment to explore undervalued small-cap stocks, particularly those that have seen insider buying—a potential indicator of confidence in future performance. In this context, identifying promising small-cap stocks involves looking for companies with strong fundamentals and recent insider transactions.

Top 10 Undervalued Small Caps With Insider Buying

Name	PE	PS	Discount to Fair Value	Value Rating
Hanover Bancorp	9.1x	2.1x	49.12%	★★★★★☆
Essentra	849.8x	1.6x	47.16%	★★★★★☆
Cabka	NA	0.4x	49.42%	★★★★★☆
Hemisphere Energy	6.1x	2.4x	7.23%	★★★★☆☆
Information Services	23.2x	2.0x	-62.03%	★★★★☆☆
Sagicor Financial	1.4x	0.3x	-44.91%	★★★★☆☆
German American Bancorp	14.4x	4.8x	44.75%	★★★☆☆☆
Franchise Brands	116.8x	2.9x	48.85%	★★★☆☆☆
Community West Bancshares	18.7x	2.9x	42.25%	★★★☆☆☆
Industrial Logistics Properties Trust	NA	0.7x	-254.82%	★★★☆☆☆

Click here to see the full list of 206 stocks from our Undervalued Small Caps With Insider Buying screener.

Below we spotlight a couple of our favorites from our exclusive screener.

Wizz Air Holdings (LSE:WIZZ)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Wizz Air Holdings is a low-cost airline operating across Europe and parts of the Middle East with a market cap of approximately £2.50 billion.

Operations: Wizz Air Holdings generates revenue primarily from its entire route network, amounting to €5.10 billion for the latest period. The company's gross profit margin has shown variability, reaching 22.49% recently.

PE: 5.2x

Wizz Air Holdings, a small-cap airline, has shown mixed financial performance recently. For the first quarter ending June 30, 2024, revenue slightly increased to €1.26 billion from €1.24 billion year-on-year, but net income dropped significantly to €5.8 million from €62.8 million. Despite volatile share prices and reliance on higher-risk external borrowing for funding, insider confidence is evident with recent purchases in July 2024. The company forecasts earnings growth of 20.78% annually and expects load factors of 92% for fiscal year 2025.

• Take a closer look at Wizz Air Holdings' potential here in our valuation report.

• Understand Wizz Air Holdings' track record by examining our Past report.

MaxLinear (NasdaqGS:MXL)

Simply Wall St Value Rating: ★★★★☆☆

Overview: MaxLinear is a company that designs, develops, and sells semiconductors with a market cap of approximately $2.32 billion.

Operations: MaxLinear generates revenue primarily from its semiconductor segment, with recent figures showing $448.14 million. The company has experienced fluctuating net income margins, recently reporting a net income margin of -42.38% for the latest period ending June 30, 2024. Gross profit margins have varied over time, currently at 53.99%.

PE: -6.1x

MaxLinear, a company recently presenting at multiple technology conferences, has shown insider confidence with CEO Kishore Seendripu purchasing 108,303 shares valued at US$1.4 million. Despite a volatile share price and significant revenue drop—Q2 sales fell to US$91.99 million from US$183.94 million year-over-year—their innovative Panther III storage accelerator offers substantial cost and performance benefits in the booming data storage market driven by AI advancements. Future earnings are projected to grow significantly by 82.84% annually, indicating potential for recovery and growth in this small-cap stock despite current challenges.

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

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

Shanghai Chicmax Cosmetic (SEHK:2145)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Shanghai Chicmax Cosmetic is a company engaged in the manufacture and sale of cosmetic products with a market cap of CN¥6.11 billion.

Operations: The company's primary revenue stream comes from the manufacture and sale of cosmetic products, generating CN¥6.11 billion as of 2024-06-30. Notably, the gross profit margin has shown an upward trend, reaching 74.96% in the same period.

PE: 18.1x

Shanghai Chicmax Cosmetic, a small cap stock, reported impressive financial results for the first half of 2024 with sales reaching CNY 3.5 billion and net income at CNY 401 million, both significantly higher than the previous year. Insider confidence is evident with recent purchases by executives during this period. The company also announced an interim dividend of RMB 0.75 per share to be paid in November 2024, reflecting strong cash flow management and shareholder returns.

• Click here and access our complete valuation analysis report to understand the dynamics of Shanghai Chicmax Cosmetic.

• Explore historical data to track Shanghai Chicmax Cosmetic's performance over time in our Past section.

Summing It All Up

• Take a closer look at our Undervalued Small Caps With Insider Buying list of 206 companies by clicking here.
• Have you diversified into these companies? Leverage the power of Simply Wall St's portfolio to keep a close eye on market movements affecting your investments.
• Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors.

Want To Explore Some Alternatives?

• 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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