Exploring Undervalued Small Caps With Insider Action In The United States July 2024

Amidst a rebound in major US indices like the Nasdaq 100 and S&P 500, which both saw increases of over 1% following a challenging previous week, the market appears cautiously optimistic as it anticipates upcoming economic data releases. In this context, identifying undervalued small-cap stocks with insider buying can offer potential opportunities for investors looking to capitalize on market segments that may react more dynamically to economic shifts.

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

Name	PE	PS	Discount to Fair Value	Value Rating
Thryv Holdings	NA	0.7x	28.14%	★★★★★☆
AtriCure	NA	2.8x	46.76%	★★★★★☆
Columbus McKinnon	22.9x	1.1x	45.55%	★★★★☆☆
Papa John's International	17.9x	0.6x	41.13%	★★★★☆☆
Franklin Financial Services	9.9x	2.0x	31.08%	★★★★☆☆
PCB Bancorp	10.5x	2.8x	35.05%	★★★★☆☆
Chatham Lodging Trust	NA	1.4x	14.67%	★★★★☆☆
Citizens & Northern	13.9x	3.1x	33.85%	★★★☆☆☆
Community West Bancshares	18.7x	2.9x	42.25%	★★★☆☆☆
Delek US Holdings	NA	0.1x	-124.21%	★★★☆☆☆

Click here to see the full list of 68 stocks from our Undervalued US Small Caps With Insider Buying screener.

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

RxSight (NasdaqGM:RXST)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: RxSight is a company that focuses on the research and development, manufacture, and sale of light adjustable lenses and related capital equipment.

Operations: The company has seen a notable improvement in gross profit margin, increasing from -0.81% at the end of 2019 to 63.39% by mid-2024, reflecting enhanced efficiency or pricing in its core operations of developing and manufacturing light adjustable lenses and related equipment. Despite this growth in gross profitability, net income has remained negative over the same period, highlighting ongoing challenges in managing operational costs or other financial pressures.

PE: -41.9x

Despite recent operational challenges, including its drop from multiple Russell indexes as of July 1, 2024, RxSight's financial narrative shows promise with a significant revenue jump to US$29.51 million in Q1 2024 from US$17.49 million the previous year. This growth trajectory is supported by raised full-year revenue forecasts signaling potential market confidence. Insider confidence is evident as they recently purchased shares, underscoring a belief in the company’s strategic direction despite current unprofitability and shareholder dilution over the past year.

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

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

Enhabit (NYSE:EHAB)

Simply Wall St Value Rating: ★★★★★☆

Overview: Enhabit operates in the healthcare sector, providing home health and hospice services with a market capitalization of approximately $1.04 billion.

Operations: In 2024, the company reported a revenue of $1.04 billion with a gross profit of $506.40 million, reflecting a gross profit margin of 48.52%. Over recent years, there has been a noticeable decline in the net income margin, culminating in -7.95% for the same period.

PE: -6.0x

Amidst a backdrop of investor activism and strategic reassessments, Enhabit has emerged as a focal point for potential growth in the undervalued small-cap sector. Recently, AREX Capital Management has pushed for substantial board changes to enhance operational efficiency and shareholder value, reflecting its strong belief in Enhabit's untapped potential. This move aligns with the company's inclusion in various Russell indexes on July 1, 2024, underscoring its growth trajectory. Moreover, earnings are projected to surge by over 100% annually. Such dynamics hint at a robust confidence from insiders about the firm’s future prospects.

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

• Learn about Enhabit's historical performance.

Enviri (NYSE:NVRI)

Simply Wall St Value Rating: ★★★★★☆

Overview: Enviri operates primarily in environmental services, focusing on sectors such as clean earth and environmental management, with a market capitalization of approximately $2.11 billion.

Operations: The company has experienced a gross profit margin trend ranging from 18.44% to 21.29% over recent quarters, with the latest figure at 21.29%. Total revenue for the most current period was $2.11 billion, reflecting a consistent scale of operations across its segments including Clean Earth and Harsco Environmental which collectively contributed approximately $2.10 billion in revenue.

PE: -15.8x

Enviri Corporation, a notable player in the undervalued sectors, has shown considerable insider confidence with recent purchases signaling strong belief in the company's prospects. Despite relying solely on external borrowing—a higher risk funding strategy—Enviri anticipates robust earnings growth of 110.66% annually. Recently adjusted upward, their 2024 earnings guidance reflects an operational income boost to US$153 million max. Furthermore, Enviri’s strategic presentations at key industry conferences underline its proactive stance in shaping market perceptions and driving future growth.

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

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

Turning Ideas Into Actions

• Unlock more gems! Our Undervalued US Small Caps With Insider Buying screener has unearthed 65 more companies for you to explore.Click here to unveil our expertly curated list of 68 Undervalued US Small Caps With Insider Buying.
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Seeking Other Investments?

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• 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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