Undervalued Small Caps With Insider Action To Watch In August 2024

As global markets continue to recover from the early August sell-off, hopes for a "soft landing" in the U.S. economy have buoyed investor sentiment. The S&P 600, which tracks small-cap stocks, has also seen gains amid this positive outlook. In such an environment, identifying undervalued small-cap stocks with significant insider action can offer promising opportunities for investors looking to capitalize on market momentum and potential growth.

Top 10 Undervalued Small Caps With Insider Buying

Name	PE	PS	Discount to Fair Value	Value Rating
Tokmanni Group Oyj	15.4x	0.4x	38.33%	★★★★★★
Columbus McKinnon	20.3x	0.9x	44.31%	★★★★★★
Norcros	7.5x	0.5x	2.69%	★★★★☆☆
Trican Well Service	8.0x	1.0x	7.09%	★★★★☆☆
Franklin Financial Services	9.6x	1.9x	39.21%	★★★★☆☆
Hemisphere Energy	6.8x	2.5x	13.42%	★★★☆☆☆
MYR Group	34.9x	0.5x	40.99%	★★★☆☆☆
Sagicor Financial	1.3x	0.3x	-43.80%	★★★☆☆☆
Community West Bancshares	18.7x	2.9x	42.25%	★★★☆☆☆
Titan Machinery	3.2x	0.1x	-20.61%	★★★☆☆☆

Click here to see the full list of 207 stocks from our Undervalued Small Caps With Insider Buying screener.

Let's dive into some prime choices out of from the screener.

Distribution Solutions Group (NasdaqGS:DSGR)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Distribution Solutions Group is a diversified industrial distribution company with operations spanning Lawson, TestEquity, and Gexpro Services, and has a market cap of approximately $1.05 billion.

Operations: The company generates revenue primarily from Lawson ($463.59 million), Testequity ($782.97 million), and Gexpro Services ($402.23 million). Over recent periods, net income margins have fluctuated, reaching a high of 1.68% and a low of -1.25%. Gross profit margins have shown an upward trend, peaking at 36.03%.

PE: -78.2x

Distribution Solutions Group, Inc. recently increased its borrowing capacity to US$1.06 billion, aiming to fuel acquisitions and drive long-term value. Despite a drop in net income for Q2 2024 compared to last year, the company reported sales growth from US$378 million to US$440 million. Insider confidence is evident with recent share repurchases worth US$1.68 million between April and June 2024. The company's strategic M&A pipeline suggests potential future growth despite current financial challenges.

• Delve into the full analysis valuation report here for a deeper understanding of Distribution Solutions Group.

• Learn about Distribution Solutions Group's historical performance.

Mastek (NSEI:MASTEK)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Mastek is an IT services company specializing in digital transformation solutions, with a market cap of ₹7.12 billion.

Operations: The company generates revenue primarily from IT Services, with the latest reported revenue being ₹31.42 billion. The gross profit margin has shown variations, reaching up to 1.50% and more recently recorded at 0.45%.

PE: 30.7x

Mastek, a smaller company in the tech sector, has shown promising growth with earnings projected to increase by 18.38% annually. Despite the resignation of their CEO on August 7, 2024, they quickly appointed an interim leader to maintain stability. Recent insider confidence is evident with significant stock purchases over the past six months. Their successful collaboration on London Metropolitan University's digital transformation and advancements in AI-driven platforms like icxPro highlight Mastek's innovative edge and potential for future growth.

• Click here to discover the nuances of Mastek with our detailed analytical valuation report.

• Evaluate Mastek's historical performance by accessing our past performance report.

Electrolux Professional (OM:EPRO B)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Electrolux Professional operates in the laundry and food & beverage sectors, with a market cap of approximately SEK 8.34 billion.

Operations: Electrolux Professional generates revenue primarily from its Laundry and Food & Beverage segments, with recent figures showing SEK 4526 million and SEK 7522 million, respectively. The company's gross profit margin has fluctuated between 32.98% and 37.19% over the analyzed periods, reflecting variations in cost of goods sold (COGS) relative to revenue.

PE: 26.1x

Electrolux Professional has shown steady performance with Q2 2024 sales of SEK 3.27 billion, up from SEK 3.15 billion a year ago, though net income dipped to SEK 230 million from SEK 257 million. Despite this, insider confidence is evident as they have been purchasing shares since early July. Earnings are projected to grow by nearly 20% annually, but the company relies entirely on external borrowing for funding, which adds risk due to its high debt levels.

• Unlock comprehensive insights into our analysis of Electrolux Professional stock in this valuation report.

• Gain insights into Electrolux Professional's past trends and performance with our Past report.

Make It Happen

• Take a closer look at our Undervalued Small Caps With Insider Buying list of 207 companies by clicking here.
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Contemplating Other Strategies?

• 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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