Stock Analysis

June 2024 Insight On Undervalued Small Caps With Insider Transactions

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Amid a robust surge in the U.S. stock market, with major indices like the S&P 500 and Nasdaq 100 reaching new highs largely due to mega-cap tech companies, smaller cap stocks often present unique opportunities for discerning investors. Given the current economic climate and insider transactions, understanding what makes a small-cap stock potentially undervalued could be particularly timely.

Top 10 Undervalued Small Caps With Insider Buying In The United States

NamePEPSDiscount to Fair ValueValue Rating
Ramaco Resources11.6x0.9x25.88%★★★★★★
Hanover Bancorp8.4x1.9x49.12%★★★★★☆
PCB Bancorp8.6x2.3x46.24%★★★★★☆
Thryv HoldingsNA0.7x28.74%★★★★★☆
Chatham Lodging TrustNA1.3x17.04%★★★★☆☆
Franklin Financial Services9.2x1.9x37.30%★★★☆☆☆
Community West Bancshares18.7x2.9x42.25%★★★☆☆☆
Alta Equipment GroupNA0.2x-170.98%★★★☆☆☆
Lindblad Expeditions HoldingsNA0.7x-93.03%★★★☆☆☆

Click here to see the full list of 65 stocks from our Undervalued Small Caps With Insider Buying screener.

Let's uncover some gems from our specialized screener.

AtriCure (NasdaqGM:ATRC)

Simply Wall St Value Rating: ★★★★★☆

Overview: AtriCure is a medical device company specializing in surgical and medical equipment, with a market capitalization of approximately $2.47 billion.

Operations: Surgical & Medical Equipment generated $414.60 million in revenue, with a gross profit margin of 75.26%. The company's operating expenses for the period were $348.26 million.

PE: -30.9x

AtriCure, despite its unprofitability forecast for the next three years, has shown robust revenue growth with a recent 15% to 17% increase projected for 2024. The company's innovative cryoSPHERE+ device, enhancing operative efficiency by reducing freeze times, underscores their commitment to advancing medical technology. Recently purchased shares by insiders signal confidence in the firm’s trajectory. This strategic insider activity coupled with substantial revenue forecasts positions AtriCure as a compelling entity in the healthcare sector.

NasdaqGM:ATRC Share price vs Value as at Jun 2024
NasdaqGM:ATRC Share price vs Value as at Jun 2024

Chimera Investment (NYSE:CIM)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Chimera Investment operates by investing, on a leveraged basis, in a diversified portfolio of mortgage assets.

Operations: The business generates revenue primarily through investments in mortgage assets, achieving a gross profit margin of 0.89 and net income margin of approximately 0.43% as of the latest reporting period in 2024. General and administrative expenses for this period were $54.35 million, reflecting operational costs associated with managing its investment portfolio.

PE: 8.8x

Chimera Investment recently increased its quarterly dividend to $0.35 per share, signaling financial confidence despite a reverse stock split aimed at consolidating shares and enhancing value. With a notable $65 million fixed-income offering completed in May 2024, they're bolstering their capital structure for future endeavors. Insider confidence is evident as they've recently purchased shares, affirming belief in the company's prospects amidst external borrowings that pose higher risks. This blend of strategic financial maneuvers and insider activity paints a picture of a firm poised for recalibration and potential growth.

NYSE:CIM Ownership Breakdown as at Jun 2024
NYSE:CIM Ownership Breakdown as at Jun 2024

Leggett & Platt (NYSE:LEG)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Leggett & Platt is a diversified manufacturer that designs and produces various engineered components and products, including bedding, specialized products, and furniture, flooring & textile items, with a market capitalization of approximately $4.65 billion.

Operations: In the latest financial period, the company generated $4.61 billion in revenue with a net income of -$158.70 million, reflecting a gross profit margin of 17.83%. The primary revenue contributors were Bedding Products ($1.91 billion), Specialized Products ($1.28 billion), and Furniture, Flooring & Textile Products ($1.46 billion).

PE: -10.0x

Recently, Leggett & Platt has demonstrated strategic financial maneuvers, notably a shift in leadership with Karl G. Glassman reassuming executive roles to steer the company through current market dynamics. With earnings forecasted to grow by 40% annually and insider confidence underscored by recent acquisitions of shares, the firm is actively seeking growth through acquisitions while managing debt prudently. Despite a dividend cut, their reaffirmed guidance and sales figures suggest cautious optimism for their fiscal health and expansion prospects.

NYSE:LEG Share price vs Value as at Jun 2024
NYSE:LEG Share price vs Value as at Jun 2024

Key Takeaways

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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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