Discover October 2024's Best Undervalued Small Caps With Insider Buys

As global markets react to China's robust stimulus measures and the U.S. stock indices reach record highs, small-cap stocks have shown mixed performance, with the Russell 2000 Index slightly down for the week. Despite this volatility, opportunities remain for discerning investors who can identify undervalued small-cap companies with strong insider buying signals. When evaluating potential investments in this environment, it's crucial to consider companies that not only show signs of being undervalued but also demonstrate confidence from insiders through their buying activities.

Top 10 Undervalued Small Caps With Insider Buying

Name	PE	PS	Discount to Fair Value	Value Rating
Columbus McKinnon	22.0x	1.0x	40.85%	★★★★★★
Thryv Holdings	NA	0.7x	26.80%	★★★★★☆
Rogers Sugar	15.6x	0.6x	47.36%	★★★★☆☆
MYR Group	34.4x	0.5x	42.13%	★★★★☆☆
Studsvik	19.6x	1.2x	43.97%	★★★★☆☆
Essentra	718.7x	1.4x	38.07%	★★★★☆☆
Genus	166.8x	2.0x	-0.87%	★★★★☆☆
German American Bancorp	13.6x	4.5x	47.72%	★★★☆☆☆
Community West Bancshares	18.7x	2.9x	42.25%	★★★☆☆☆
Delek US Holdings	NA	0.1x	-217.33%	★★★☆☆☆

Click here to see the full list of 176 stocks from our Undervalued Small Caps With Insider Buying screener.

Here's a peek at a few of the choices from the screener.

Hang Lung Group (SEHK:10)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Hang Lung Group is a property investment and development company with operations primarily focused on property leasing in Hong Kong and Mainland China, boasting a market cap of HK$24.30 billion.

Operations: The company generates revenue primarily from property sales in Hong Kong and property leasing in both Hong Kong and Mainland China. For the period ending 2023-09-30, it reported a gross profit margin of 71.85% on a revenue of HK$10.94 billion, with net income at HK$2.89 billion.

PE: 7.6x

Hang Lung Group, a smaller company in the market, has seen its net profit margin drop from 27.2% to 16.9% over the past year and earnings have been declining by 12.2% annually over five years. Despite these challenges, insider confidence is evident with Wenbwo Chan purchasing 200,000 shares for HK$1.93 million recently. For H1 2024, sales increased to HK$6.38 billion from HK$5.53 billion last year, though net income fell to HK$888 million from HK$1.68 billion previously.

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

• Evaluate Hang Lung Group's historical performance by accessing our past performance report.

China Lesso Group Holdings (SEHK:2128)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: China Lesso Group Holdings is a leading manufacturer and distributor of plastic and rubber products with operations primarily in China, boasting a market cap of CN¥42.50 billion.

Operations: The company's revenue primarily comes from the Plastics & Rubber segment, amounting to CN¥29.13 billion. The gross profit margin has fluctuated, reaching 28.79% as of June 30, 2023. Operating expenses and non-operating expenses are significant cost components impacting net income margins, which were recorded at 6.58% for the same period.

PE: 6.9x

China Lesso Group Holdings, a small-cap stock, recently reported a decline in earnings for the first half of 2024, with sales dropping to CNY 13.56 billion from CNY 15.30 billion and net income falling to CNY 1.04 billion from CNY 1.49 billion year-over-year. Despite this, insider confidence remains strong; Luen Hei Wong purchased four million shares valued at over US$10 million between April and June 2024. The company's high debt level is offset by its forecasted annual earnings growth of over 10%.

• Unlock comprehensive insights into our analysis of China Lesso Group Holdings stock in this valuation report.

• Review our historical performance report to gain insights into China Lesso Group Holdings''s past performance.

Gemdale Properties and Investment (SEHK:535)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Gemdale Properties and Investment focuses on property development and property investment and management, with a market cap of approximately CN¥4.39 billion.

Operations: The company generates revenue primarily from Property Development (CN¥17.26 billion) and Property Investment and Management (CN¥1.23 billion). The gross profit margin has shown considerable variation, with recent figures at 10.57% as of December 31, 2023. Operating expenses have been rising, reaching CN¥677.456 million by June 30, 2024. Net income margins have fluctuated significantly over the periods reviewed, showing a negative trend in the latest data points.

PE: -2.6x

Gemdale Properties and Investment has recently faced financial challenges, reporting a net loss of CNY 2.18 billion for the half year ending June 30, 2024, compared to a net income of CNY 562 million the previous year. Despite this, insider confidence is evident with Non-Executive Director Lian Huat Loh purchasing 10 million shares valued at approximately US$2.6 million in August 2024. The company's aggregate contracted sales from January to August totaled RMB 12.43 billion across an area of roughly 944,400 square meters.

• Navigate through the intricacies of Gemdale Properties and Investment with our comprehensive valuation report here.

• Explore historical data to track Gemdale Properties and Investment's performance over time in our Past section.

Next Steps

• Embark on your investment journey to our 176 Undervalued Small Caps With Insider Buying selection here.
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Ready For A Different Approach?

• 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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