Three Top Undervalued Small Cap Picks With Insider Activity

As global markets face a cooling U.S. labor market and unexpected economic data, the small-cap sector has seen notable volatility, with the Russell 2000 Index pulling back sharply. Despite these challenges, opportunities may exist within undervalued small-cap stocks showing insider activity. In times of market uncertainty, identifying stocks with strong fundamentals and insider buying can provide valuable insights into potential investment opportunities.

Top 10 Undervalued Small Caps With Insider Buying

Name	PE	PS	Discount to Fair Value	Value Rating
Dundee Precious Metals	8.1x	3.0x	30.81%	★★★★★★
Nexus Industrial REIT	2.6x	3.3x	24.76%	★★★★★☆
Russel Metals	10.9x	0.5x	47.95%	★★★★★☆
Trican Well Service	8.2x	1.0x	5.49%	★★★★☆☆
Guardian Capital Group	10.5x	4.1x	37.94%	★★★★☆☆
Calfrac Well Services	2.7x	0.2x	-30.70%	★★★★☆☆
Hemisphere Energy	6.8x	2.5x	14.11%	★★★☆☆☆
Westshore Terminals Investment	14.2x	3.8x	25.19%	★★★☆☆☆
Community West Bancshares	18.7x	2.9x	42.25%	★★★☆☆☆
Alta Equipment Group	NA	0.2x	-152.92%	★★★☆☆☆

Click here to see the full list of 209 stocks from our Undervalued Small Caps With Insider Buying screener.

Let's uncover some gems from our specialized screener.

Permanent TSB Group Holdings (ISE:PTSB)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Permanent TSB Group Holdings is an Irish retail bank that provides a range of financial services including personal banking, mortgages, and loans with a market cap of approximately €1.68 billion.

Operations: The company's primary revenue stream is from its banking operations, with recent quarterly revenues reaching €678 million. Operating expenses have consistently been high, impacting net income significantly. The net income margin has shown variability, with recent figures at 0.09%.

PE: 13.2x

Permanent TSB Group Holdings has seen significant insider confidence with share purchases over the past six months. Despite a highly volatile share price recently, the company reported strong financials for H1 2024, including a net income jump to €63 million from €25 million last year. Earnings per share surged to €0.076 from €0.007 year-over-year, reflecting improved profitability despite lower profit margins (9.3% vs 51.1%). With earnings forecasted to grow by 45% annually, this small cap stock shows promising potential for future growth amidst sector challenges and executive changes.

• Delve into the full analysis valuation report here for a deeper understanding of Permanent TSB Group Holdings.

• Explore historical data to track Permanent TSB Group Holdings' performance over time in our Past section.

Mastek (NSEI:MASTEK)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Mastek is an IT services company with a market cap of ₹5.67 billion, specializing in providing digital transformation solutions to various industries.

Operations: The company generates revenue primarily from IT Services, with a gross profit margin of 45.10%. Operating expenses include significant allocations to general and administrative costs, depreciation and amortization, and non-operating expenses.

PE: 29.5x

Mastek, a company with an annual earnings growth forecast of 18.38%, recently reported Q1 2024 results showing increased sales of INR 8,128.9 million from INR 7,252.5 million the previous year. Despite relying solely on external borrowing for funding, insider confidence is evident as they purchased shares in recent months. The launch of their icxPro platform powered by NVIDIA AI aims to enhance customer experience and streamline AI application development across Healthcare, Manufacturing, and BFSI sectors.

• Navigate through the intricacies of Mastek with our comprehensive valuation report here.

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

Kinetic Development Group (SEHK:1277)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Kinetic Development Group focuses on property development and investment, with a market cap of CN¥1.50 billion.

Operations: Kinetic Development Group generates revenue primarily through its sales, with a significant portion of its costs attributed to the cost of goods sold (COGS). The company has shown a gross profit margin trend reaching up to 69.80% and net income margin up to 46.18%. Operating expenses include general & administrative expenses and sales & marketing expenses.

PE: 4.0x

Kinetic Development Group, a small cap company, recently amended its bylaws and reduced its final dividend to HKD 0.05 per share for the year ending December 2023. Despite relying solely on external borrowing for funding, insider confidence is evident with significant share purchases by executives in Q1 2024. This activity suggests optimism about future performance despite current financial constraints. The company's strategic amendments and insider buying indicate potential growth opportunities in the near term.

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

• Review our historical performance report to gain insights into Kinetic Development Group's's past performance.

Summing It All Up

• Get an in-depth perspective on all 209 Undervalued Small Caps With Insider Buying by using our screener here.
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Ready To Venture Into Other Investment Styles?

• 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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