Undervalued Small Caps With Insider Action In November 2024

As global markets continue to navigate geopolitical tensions and economic uncertainties, smaller-cap indexes have recently outperformed their larger counterparts, reflecting a renewed investor interest in this segment. With U.S. initial jobless claims at a seven-month low and positive sentiment driven by strong labor market data, small-cap stocks are gaining traction as investors seek opportunities in an environment characterized by broad-based gains across major indices. In such conditions, identifying promising small-cap stocks involves looking for those with solid fundamentals and active insider participation, which can signal confidence from those closest to the company’s operations.

Top 10 Undervalued Small Caps With Insider Buying

Name	PE	PS	Discount to Fair Value	Value Rating
Paradeep Phosphates	23.6x	0.8x	29.59%	★★★★★☆
Maharashtra Seamless	9.8x	1.7x	36.25%	★★★★★☆
Dicker Data	18.8x	0.7x	-56.10%	★★★★☆☆
Avia Avian	15.5x	3.5x	15.35%	★★★★☆☆
NCL Industries	15.2x	0.6x	-85.74%	★★★☆☆☆
Semen Indonesia (Persero)	20.7x	0.7x	29.62%	★★★☆☆☆
L.G. Balakrishnan & Bros	13.6x	1.6x	-36.10%	★★★☆☆☆
Sheela Foam	58.5x	2.6x	13.61%	★★★☆☆☆
Community West Bancshares	18.7x	2.9x	42.25%	★★★☆☆☆
Genus	141.4x	1.7x	27.01%	★★★☆☆☆

Click here to see the full list of 184 stocks from our Undervalued Small Caps With Insider Buying screener.

Let's take a closer look at a couple of our picks from the screened companies.

Gemdale Properties and Investment (SEHK:535)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Gemdale Properties and Investment is engaged in property development and property investment and management, with a focus on real estate projects, and has a market capitalization of approximately CN¥5.92 billion.

Operations: The company's primary revenue streams are from property development (CN¥17.26 billion) and property investment and management (CN¥1.23 billion). The gross profit margin has varied significantly, with recent figures showing a decline to 0.09% as of June 2024, indicating pressure on profitability despite an increase in revenue over time. Operating expenses have consistently increased, reaching CN¥677.46 million by June 2024, impacting the net income margin which turned negative at -13.03%.

PE: -1.8x

Gemdale Properties and Investment, a smaller company in its sector, has seen significant insider confidence with Lian Huat Loh purchasing 10 million shares for approximately RMB 2.6 million, reflecting a strong belief in the company's potential despite recent financial challenges. Earnings have declined by 29.5% annually over five years, and funding relies entirely on external borrowing. Recent sales reports show contracted sales of RMB 16.27 billion from January to October 2024, highlighting ongoing market activity amid volatility.

• Click here and access our complete valuation analysis report to understand the dynamics of Gemdale Properties and Investment.

• Assess Gemdale Properties and Investment's past performance with our detailed historical performance reports.

Cheerwin Group (SEHK:6601)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Cheerwin Group is a company involved in the production and distribution of household care, personal care, and pet products, with a market capitalization of CN¥3.5 billion.

Operations: The company derives its revenue primarily from Household Care, contributing significantly to its total earnings. Over recent periods, the gross profit margin has shown an upward trend, reaching 47.89% by mid-2024. Operating expenses are largely driven by sales and marketing efforts, with notable figures in this area.

PE: 10.5x

Cheerwin Group, a smaller company in its sector, has caught attention for potential value. Insider confidence is evident as Danxia Chen acquired 300,000 shares recently with a transaction value of approximately HK$405,059. Despite relying solely on external borrowing for funding, which carries higher risk without customer deposits to balance it out, the company shows promise with earnings projected to grow by 3.92% annually. This blend of insider activity and growth prospects suggests an intriguing opportunity within its industry context.

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

• Gain insights into Cheerwin Group's past trends and performance with our Past report.

Ferretti (SEHK:9638)

Simply Wall St Value Rating: ★★★★★☆

Overview: Ferretti is engaged in the design, construction, and marketing of yachts and recreational boats with a market cap of €1.84 billion.

Operations: The company generates revenue primarily through the design, construction, and marketing of yachts and recreational boats, with a recent gross profit margin of 36.04%. Operating expenses include significant allocations towards general and administrative costs.

PE: 10.9x

Ferretti, a company in the luxury yacht sector, has shown insider confidence with recent share purchases. Despite being dropped from the S&P Global BMI Index in September 2024, Ferretti's earnings call on November 13 highlighted a promising growth trajectory with sales reaching €695.1 million for the first half of 2024, up from €628.18 million last year. The departure of key executives was managed smoothly without impacting operations, suggesting stability amid leadership changes.

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

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

Summing It All Up

• Access the full spectrum of 184 Undervalued Small Caps With Insider Buying by clicking on this link.
• Are these companies part of your investment strategy? Use Simply Wall St to consolidate your holdings into a portfolio and gain insights with our comprehensive analysis tools.
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Curious About Other Options?

• 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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