Explore These 3 Undervalued Small Caps With Insider Action In None

In recent weeks, the global market landscape has been influenced by rising U.S. Treasury yields, which have put pressure on stocks, particularly impacting small-cap indices like the S&P 600. Amid this environment of cautious economic growth and shifting interest rate expectations, investors are increasingly focused on identifying small-cap stocks that may offer value despite broader market challenges. In such conditions, a good stock often exhibits strong fundamentals and resilience to economic fluctuations while being positioned to capitalize on potential recovery in its sector or industry.

Top 10 Undervalued Small Caps With Insider Buying

Name	PE	PS	Discount to Fair Value	Value Rating
Senior	18.2x	0.6x	37.42%	★★★★★★
Bytes Technology Group	21.9x	5.6x	12.39%	★★★★★☆
Maharashtra Seamless	9.5x	1.6x	38.09%	★★★★★☆
Calfrac Well Services	2.5x	0.2x	19.71%	★★★★☆☆
NCL Industries	12.2x	0.5x	-32.50%	★★★☆☆☆
Paradeep Phosphates	22.9x	0.8x	-87.12%	★★★☆☆☆
L.G. Balakrishnan & Bros	14.6x	1.7x	-44.82%	★★★☆☆☆
Community West Bancshares	18.7x	2.9x	42.25%	★★★☆☆☆
Dwarikesh Sugar Industries	NA	0.9x	-20.41%	★★★☆☆☆
Bajel Projects	253.7x	2.0x	27.17%	★★★☆☆☆

Click here to see the full list of 191 stocks from our Undervalued Small Caps With Insider Buying screener.

We'll examine a selection from our screener results.

Paradeep Phosphates (NSEI:PARADEEP)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Paradeep Phosphates is a leading fertilizer company in India, primarily engaged in the manufacturing and marketing of complex phosphatic fertilizers, with a market capitalization of ₹45.74 billion.

Operations: Paradeep Phosphates generates revenue primarily through its sales of products, with a notable gross profit margin trend that peaked at 31.77% in March 2017 before fluctuating and reaching 26.37% by October 2024. The company's cost of goods sold (COGS) significantly impacts its gross profit, with COGS consistently accounting for a substantial portion of revenue over the periods observed. Operating expenses and non-operating expenses also contribute to the financial dynamics, affecting overall profitability.

PE: 22.9x

Paradeep Phosphates, a smaller company in the fertilizer sector, recently reported impressive earnings growth for Q2 2024, with net income jumping to INR 2.3 billion from INR 894 million a year ago. This rise in earnings per share from INR 1.1 to INR 2.79 underscores potential value despite regulatory challenges like environmental fines and tax re-assessments. Insider confidence is evident through recent purchases of shares by company insiders, suggesting belief in future prospects amidst operational resumption at key plants and ongoing financial improvements.

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

• Understand Paradeep Phosphates' track record by examining our Past report.

Electrolux Professional (OM:EPRO B)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Electrolux Professional operates in the commercial kitchen and laundry equipment sectors, with a focus on providing innovative solutions for food service and laundry operations, and has a market cap of approximately SEK 11.25 billion.

Operations: Electrolux Professional generates revenue primarily from its Food & Beverage and Laundry segments, with the former contributing more significantly to total revenue. Over recent periods, the company's gross profit margin has shown a slight upward trend, reaching 34.12% as of October 2024. Operating expenses are predominantly driven by sales and marketing efforts, which consistently represent a substantial portion of overall costs.

PE: 27.3x

Electrolux Professional, a smaller company in the appliance sector, is attracting attention with its recent financial performance and innovative product launches. In Q3 2024, it reported sales of SEK 2.9 billion and net income of SEK 187 million, showing growth from the previous year. The introduction of the NeoBlue Touch dishwasher promises efficiency gains and potential sales growth in consumables. Despite high debt levels from external borrowing, insider confidence remains evident with recent share purchases by executives this year.

• Dive into the specifics of Electrolux Professional here with our thorough valuation report.

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

Nolato (OM:NOLA B)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Nolato is a Swedish company specializing in the development and production of polymer product systems for medical, automotive, and consumer electronics industries, with a market capitalization of SEK 13.87 billion.

Operations: The company generates revenue primarily from Medical Solutions, with a significant portion of its costs attributed to the cost of goods sold (COGS). Over recent periods, the net profit margin has shown a downward trend, reaching 4.56% in the latest quarter ending October 2024. Operating expenses and non-operating expenses have varied but remain substantial components impacting overall profitability.

PE: 26.3x

Nolato's recent earnings report highlights a promising trajectory, with Q3 sales reaching SEK 2,401 million and net income climbing to SEK 164 million from last year's SEK 69 million. Earnings per share doubled to SEK 0.61, indicating strong performance despite the company's reliance on external borrowing. Insider confidence is evident as they have increased their holdings recently, suggesting optimism about future growth. With earnings projected to grow annually by nearly 20%, Nolato presents an intriguing opportunity in its sector.

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

• Explore historical data to track Nolato's performance over time in our Past section.

Turning Ideas Into Actions

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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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