Exploring Three Undervalued Small Caps With Insider Action In The Region

As global markets exhibit mixed signals with modest gains in U.S. stocks and a cautious economic outlook, small-cap stocks present a unique landscape for potential value discovery. In the context of these broader market dynamics, identifying undervalued small caps with insider action can offer intriguing opportunities for investors looking to tap into potentially overlooked segments of the market.

Top 10 Undervalued Small Caps With Insider Buying

Name	PE	PS	Discount to Fair Value	Value Rating
Ramaco Resources	11.4x	0.9x	27.12%	★★★★★★
Norcros	7.8x	0.5x	41.37%	★★★★★☆
PCB Bancorp	8.5x	2.3x	46.93%	★★★★★☆
AtriCure	NA	2.7x	42.50%	★★★★★☆
Hanover Bancorp	8.5x	1.9x	49.11%	★★★★☆☆
NSI	NA	4.5x	47.74%	★★★★☆☆
Robert Walters	20.6x	0.3x	35.56%	★★★☆☆☆
Community West Bancshares	18.7x	2.9x	42.25%	★★★☆☆☆
Delek US Holdings	NA	0.1x	-151.77%	★★★☆☆☆
Alta Equipment Group	NA	0.1x	-155.91%	★★★☆☆☆

Click here to see the full list of 232 stocks from our Undervalued Small Caps With Insider Buying screener.

We'll examine a selection from our screener results.

AtriCure (NasdaqGM:ATRC)

Simply Wall St Value Rating: ★★★★★☆

Overview: AtriCure is a medical device company specializing in surgical and medical equipment, with a market capitalization of approximately $2.47 billion.

Operations: The business generates revenue from its surgical and medical equipment segment, with the most recent figures showing a revenue of $414.60 million. The gross profit margin has shown an upward trend, reaching 75.26% in the latest period, reflecting efficient cost management relative to production costs which stood at $102.57 million.

PE: -29.9x

AtriCure, recently presenting at multiple healthcare conferences, announced a projected revenue increase to US$459 million for 2024, signaling robust growth. Despite current unprofitability and shareholder dilution over the past year, their innovative cryoSPHERE+ device is set to enhance surgical outcomes by reducing operative times—a factor likely to boost adoption rates. This blend of technological advancement and financial growth metrics reflects a potentially overlooked opportunity within the market.

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

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

Kinetic Development Group (SEHK:1277)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Kinetic Development Group is a company involved in various business sectors with a market capitalization of approximately CN¥1.27 billion.

Operations: The company generates revenue through the sale of goods and services, evidenced by an increase in gross profit from CN¥7.65 million in June 2013 to CN¥2.80 billion by December 2023, reflecting a significant expansion in operations. Over the same period, gross profit margin saw a notable rise from 9.66% to approximately 59.07%.

PE: 4.1x

Kinetic Development Group, a lesser-known entity in the market, recently demonstrated insider confidence as they approved significant changes to their corporate governance and declared both regular and special dividends—HKD 0.05 and HKD 0.03 per share respectively. These moves, particularly the insider purchases made in early May 2024, suggest a robust belief in the company's prospects among those closest to its operations. Despite relying solely on external borrowing—a higher risk funding strategy—the firm's ability to maintain dividend payments points to a potentially overlooked financial resilience. This blend of qualitative governance adjustments alongside quantitative financial commitments paints Kinetic as an intriguing option for those seeking exposure to promising yet underappreciated assets.

• Unlock comprehensive insights into our analysis of Kinetic Development Group stock in this valuation report.

• Assess Kinetic Development Group's past performance with our detailed historical performance reports.

Hammond Power Solutions (TSX:HPS.A)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Hammond Power Solutions specializes in the manufacture and sale of transformers, with a market capitalization of approximately CA$729.61 million.

Operations: The business generates CA$729.61 million from the manufacture and sale of transformers, with a gross profit margin recently reported at 32.49%. Notably, the net income for the latest period stood at CA$55.63 million.

PE: 23.1x

Hammond Power Solutions, with its substantial year-over-year revenue increase from CAD 558.46 million to CAD 710.06 million, demonstrates strong financial growth. Despite a recent dip in quarterly net income to CAD 7.95 million from last year's CAD 15.73 million, the company's robust annual performance and an earnings forecast growth of 18.59% per year suggest resilience and potential for recovery. Insider confidence is evident as they recently purchased shares, underscoring their belief in the company’s prospects amidst preparations for future opportunities indicated by their new Shelf Registration filing for Class A Subordinate Voting Shares.

• Click to explore a detailed breakdown of our findings in Hammond Power Solutions' valuation report.

• Review our historical performance report to gain insights into Hammond Power Solutions''s past performance.

Turning Ideas Into Actions

• Get an in-depth perspective on all 232 Undervalued Small Caps With Insider Buying by using our screener here.
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Seeking Other Investments?

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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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