Spotlight On Undervalued Small Caps With Insider Activity In December 2024

In December 2024, global markets are exhibiting mixed performances, with major U.S. indices like the S&P 500 and Nasdaq Composite reaching record highs while the Russell 2000 Index, which tracks small-cap stocks, has seen a decline following weeks of outperformance. Amidst this backdrop of diverging market trends and economic indicators such as job growth rebounding in November and expectations surrounding Federal Reserve rate cuts, investors may find value in exploring small-cap stocks that show potential for growth through insider activity. In such a dynamic environment, identifying promising small-cap stocks often involves assessing their intrinsic value relative to current market conditions and understanding how internal company actions align with broader economic trends.

Top 10 Undervalued Small Caps With Insider Buying

Name	PE	PS	Discount to Fair Value	Value Rating
Paradeep Phosphates	24.5x	0.8x	28.12%	★★★★★☆
Maharashtra Seamless	11.9x	2.1x	24.07%	★★★★★☆
Avia Avian	14.8x	3.4x	19.67%	★★★★☆☆
Logistri Fastighets	12.7x	9.0x	41.33%	★★★★☆☆
Optima Health	NA	1.2x	36.80%	★★★★☆☆
Gooch & Housego	42.3x	1.0x	30.51%	★★★☆☆☆
L.G. Balakrishnan & Bros	15.2x	1.8x	-51.82%	★★★☆☆☆
Community West Bancshares	18.7x	2.9x	42.25%	★★★☆☆☆
Safari Investments RSA	5.0x	2.9x	10.98%	★★★☆☆☆
Digital Mediatama Maxima	NA	1.2x	17.72%	★★★☆☆☆

Click here to see the full list of 186 stocks from our Undervalued Small Caps With Insider Buying screener.

Here we highlight a subset of our preferred stocks from the screener.

ABG Sundal Collier Holding (OB:ABG)

Simply Wall St Value Rating: ★★★★☆☆

Overview: ABG Sundal Collier Holding is a Nordic investment banking firm that provides services in M&A and advisory, corporate financing, and brokerage and research, with a market cap of NOK 3.42 billion.

Operations: The company's revenue streams are primarily derived from M&A and Advisory, Corporate Financing, and Brokerage and Research. Over the given periods, it consistently achieved a gross profit margin of 100%. Operating expenses include significant allocations to general and administrative costs. The net income margin has shown fluctuations, with a peak of 27.15% in Q3 2021 before declining to 14.77% in Q1 2024.

PE: 12.2x

ABG Sundal Collier Holding, a company with a market presence in the financial sector, recently showcased insider confidence through share purchases over the past year. The third quarter of 2024 saw revenues climb to NOK 392.3 million and net income rise to NOK 45.1 million compared to last year, indicating potential value despite its reliance on external borrowing for funding. With no dilution over the past year and participation in industry seminars like the Quality-Microcap seminar on November 26, ABG shows promise for future growth amidst its small cap peers.

• Click to explore a detailed breakdown of our findings in ABG Sundal Collier Holding's valuation report.

• Explore historical data to track ABG Sundal Collier Holding's performance over time in our Past section.

Megaworld (PSE:MEG)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Megaworld is a real estate company primarily engaged in the development, leasing, and sale of properties, including residential and commercial spaces, with operations generating significant revenue from rental services (₱19.96 billion), real estate sales (₱51.52 billion), and hotel operations (₱4.80 billion).

Operations: Megaworld's revenue primarily comes from the sale of goods in real estate and services in rental and hotel operations, with real estate sales being the largest contributor. The gross profit margin showed fluctuations, reaching a peak of 65.12% in September 2023 before slightly declining to 63.31% by December 2024. Operating expenses are significant, with general and administrative expenses consistently forming a large portion of these costs.

PE: 3.6x

Megaworld, a company in the small cap category, has demonstrated growth with third-quarter revenue reaching PHP 20.69 billion, up from PHP 16.56 billion the previous year. Insider confidence is evident as they have been actively purchasing shares throughout the year, suggesting belief in its potential. The recent launch of The Bellagio Palawan project reflects Megaworld's commitment to innovative and sustainable developments, aiming for around PHP 3 billion in sales by 2030. Recent board changes may also influence strategic direction positively.

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

• Examine Megaworld's past performance report to understand how it has performed in the past.

Yixin Group (SEHK:2858)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Yixin Group operates as a leading online automobile transaction platform in China, complemented by its self-operated financing business, with a market cap of CN¥5.62 billion.

Operations: The company generates revenue primarily through its Transaction Platform Business and Self-Operated Financing Business, with the former contributing a significant portion. Over recent periods, the gross profit margin has shown variability, reaching 0.391% by mid-2024. Operating expenses are largely driven by sales and marketing efforts, followed by general and administrative costs.

PE: 8.8x

Yixin Group, a small player in its sector, is poised for growth with earnings projected to rise 19.56% annually. Despite reliance on external borrowing for funding, insider confidence is evident as they have been purchasing shares over the past year. The company is expected to release Q3 2024 results on November 29, which could provide further insight into its financial health and potential trajectory in the market.

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

• Learn about Yixin Group's historical performance.

Seize The Opportunity

• Access the full spectrum of 186 Undervalued Small Caps With Insider Buying by clicking on this link.
• Got skin in the game with these stocks? Elevate how you manage them by using Simply Wall St's portfolio, where intuitive tools await to help optimize your investment outcomes.
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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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