Undervalued Small Caps With Insider Buying Opportunities For December 2024

As global markets navigate a period of economic uncertainty, smaller-cap stocks have faced challenges, with the Russell 2000 Index underperforming larger peers like the S&P 500. Amidst expectations for a Federal Reserve rate cut and signs of a cooling labor market, investors are closely watching small-cap opportunities that may offer potential value in this shifting landscape. In such an environment, identifying stocks with strong fundamentals and strategic insider activity can be crucial for those seeking to capitalize on current market dynamics.

Top 10 Undervalued Small Caps With Insider Buying

Name	PE	PS	Discount to Fair Value	Value Rating
Maharashtra Seamless	12.0x	2.1x	24.07%	★★★★★☆
Avia Avian	14.7x	3.4x	20.20%	★★★★★☆
ABG Sundal Collier Holding	12.3x	2.1x	41.03%	★★★★☆☆
Optima Health	NA	1.3x	46.65%	★★★★☆☆
Treatt	19.5x	1.8x	48.53%	★★★☆☆☆
Gooch & Housego	41.2x	1.0x	31.94%	★★★☆☆☆
Hemisphere Energy	6.0x	2.3x	-110.15%	★★★☆☆☆
Community West Bancshares	18.7x	2.9x	42.25%	★★★☆☆☆
Safari Investments RSA	5.0x	2.9x	10.93%	★★★☆☆☆
Digital Mediatama Maxima	NA	1.2x	16.29%	★★★☆☆☆

Click here to see the full list of 185 stocks from our Undervalued Small Caps With Insider Buying screener.

Underneath we present a selection of stocks filtered out by our screen.

Ryman Healthcare (NZSE:RYM)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Ryman Healthcare is a company that specializes in the provision of integrated retirement villages for older people, with a market capitalization of approximately NZ$6.45 billion.

Operations: The company's revenue primarily stems from the provision of integrated retirement villages, with recent figures showing revenue at NZ$720.35 million. Over time, there has been a notable decline in gross profit margin, which decreased to 2.37% as of September 2024. Operating expenses have consistently increased, impacting overall profitability and contributing to net income losses in recent periods.

PE: -33.2x

Ryman Healthcare, a smaller company in the healthcare sector, recently reported half-year revenue of NZ$366.26 million, up from NZ$333.63 million last year, though net income dropped to NZ$94.37 million from NZ$187.08 million previously. Despite this dip in earnings per share and high debt levels reliant on external borrowing, insider confidence was evident with purchases made throughout 2024. Earnings are projected to grow annually by 27%, suggesting potential for future value realization amidst current challenges.

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

• Gain insights into Ryman Healthcare's historical performance by reviewing our past performance report.

Modern Times Group MTG (OM:MTG B)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Modern Times Group MTG is a Swedish digital entertainment company primarily involved in broadcasting, with a market capitalization of approximately SEK 5.89 billion.

Operations: The company has experienced fluctuations in its net income margin, with recent periods showing negative figures, such as -1.34% for the quarter ending September 30, 2024. Its revenue model primarily involves significant costs of goods sold (COGS) and substantial operating expenses, including sales and marketing and general & administrative expenses. The gross profit margin has shown a notable trend upwards over time, reaching 72.46% by the end of 2024.

PE: -140.6x

Modern Times Group, with its small market capitalization, is navigating a challenging financial landscape. The company relies entirely on external borrowing for funding, which carries higher risk compared to customer deposits. Despite this, MTG projects an impressive 87% annual earnings growth. Recent M&A activity includes acquiring Plarium Global Ltd to enhance growth through strategic synergies and expansion into casual and mid-core IPs. Q3 2024 saw sales of SEK 1,438 million but a decline in net income to SEK 174 million from the previous year’s SEK 194 million. Executive changes include CFO Nils Mösko's departure and Oliver Bulloss stepping up as interim Co-CEO at Hutch gaming studio starting January 2025.

• Dive into the specifics of Modern Times Group MTG here with our thorough valuation report.

• Review our historical performance report to gain insights into Modern Times Group MTG's's past performance.

Nivika Fastigheter (OM:NIVI B)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Nivika Fastigheter is a real estate company primarily engaged in rental operations, with a market capitalization of SEK 5.27 billion.

Operations: Nivika Fastigheter's revenue primarily stems from its real estate rental segment, with recent figures indicating a revenue of SEK 675.74 million. The company has experienced fluctuations in its net income margin, which was -0.04% as of May 2024 and improved to 0.20% by August 2024, suggesting variability in profitability over time.

PE: 28.4x

Nivika Fastigheter, a smaller company in the real estate sector, recently showcased improved financial performance with third-quarter sales reaching SEK 171.31 million, up from SEK 154.18 million the previous year. Their net income turned positive at SEK 5.48 million compared to a significant loss last year. They completed a SEK 400 million green bond offering to bolster their funding strategy, aligning with sustainable finance principles. Insider confidence is evident through recent share purchases, suggesting potential optimism about future growth prospects in this undervalued stock category.

• Get an in-depth perspective on Nivika Fastigheter's performance by reading our valuation report here.

• Gain insights into Nivika Fastigheter's past trends and performance with our Past report.

Taking Advantage

• Dive into all 185 of the Undervalued Small Caps With Insider Buying we have identified here.
• Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St's portfolio to get a 360-degree view on how they're shaping up.
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Searching for a Fresh Perspective?

• 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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