3 Undervalued Small Caps With Insider Buying In US Markets

The United States market has shown impressive momentum, rising 1.1% over the last week and 32% over the past year, with earnings projected to grow by 16% annually in the coming years. In this dynamic environment, identifying stocks that are potentially undervalued and have insider buying can be a compelling strategy for investors seeking opportunities within small-cap companies.

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

Name	PE	PS	Discount to Fair Value	Value Rating
ProPetro Holding	NA	0.6x	43.28%	★★★★★☆
Capital Bancorp	15.2x	3.1x	42.76%	★★★★☆☆
Franklin Financial Services	10.5x	2.1x	35.25%	★★★★☆☆
German American Bancorp	16.5x	5.5x	42.77%	★★★☆☆☆
USCB Financial Holdings	19.2x	5.5x	48.08%	★★★☆☆☆
First United	14.5x	3.3x	43.82%	★★★☆☆☆
Orion Group Holdings	NA	0.4x	-244.92%	★★★☆☆☆
Community West Bancshares	18.7x	2.9x	42.25%	★★★☆☆☆
Delek US Holdings	NA	0.1x	-75.38%	★★★☆☆☆
Sabre	NA	0.5x	-87.81%	★★★☆☆☆

Click here to see the full list of 51 stocks from our Undervalued US Small Caps With Insider Buying screener.

We're going to check out a few of the best picks from our screener tool.

Alerus Financial (NasdaqCM:ALRS)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Alerus Financial is a diversified financial services company providing wealth management, retirement and benefit services, and corporate administration, with a market cap of $0.43 billion.

Operations: The company's revenue streams include Wealth Management and Retirement and Benefit Services, with a notable segment adjustment contributing $78.35 million. Operating expenses are primarily driven by General & Administrative costs, which reached $119.83 million in the most recent period. The net income margin has shown variability, peaking at 22.17% in early 2021 before declining to 1.93% by late 2024.

PE: 174.3x

Alerus Financial, a smaller U.S. company, has recently experienced shifts in executive roles and board composition, with new leadership focused on risk management. Despite lower profit margins at 1.9% compared to last year's 18.8%, net interest income rose to US$22.54 million in Q3 2024 from US$20.4 million the previous year, suggesting potential for future earnings growth forecasted at over 73% annually. Insider confidence is evident through recent insider purchases, signaling faith in the company’s prospects amidst these changes.

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

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

Couchbase (NasdaqGS:BASE)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Couchbase is a software company specializing in database solutions, with a market capitalization of approximately $1.14 billion.

Operations: Couchbase generates revenue primarily from its software and programming segment, reaching $204.63 million recently. The company has experienced a gross profit margin fluctuating around 88.35% to 88.73% over recent periods, indicating efficient cost management relative to its revenue generation. Operating expenses are significant, with sales and marketing being the largest component, followed by research and development costs.

PE: -10.7x

Couchbase, a prominent enterprise NoSQL data platform, has seen insider confidence with Edward Anderson purchasing 21,080 shares for approximately US$298K. Despite being unprofitable and reliant on external borrowing, Couchbase's revenue is growing at an anticipated rate of 13.78% annually. Recent earnings showed an increase in quarterly revenue to US$51.63 million from US$45.81 million year-over-year, though net losses also rose slightly. The introduction of Capella AI Services aims to enhance developer productivity and streamline AI application development amidst rising data challenges in the industry.

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

• Learn about Couchbase's historical performance.

Univest Financial (NasdaqGS:UVSP)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Univest Financial operates as a diversified financial services company with segments in banking, insurance, and wealth management, and has a market capitalization of approximately $0.84 billion.

Operations: The company generates revenue primarily from banking, insurance, and wealth management segments, with banking being the largest contributor at $245.98 million. Operating expenses have shown an upward trend over time, with general and administrative expenses consistently being the largest component. The net income margin has varied across periods but reached a high of 34.66% in mid-2021 before settling around 25% more recently.

PE: 12.8x

Univest Financial, a smaller player in the U.S. market, has shown signs of being undervalued with its recent financial performance and strategic actions. For Q3 2024, they reported net income of US$18.58 million, up from US$17.02 million the previous year, alongside steady earnings per share growth to US$0.64 from US$0.58. Insider confidence is evident with notable buyback activity; between July and September 2024 alone, they repurchased 156,728 shares for US$4.19 million as part of a larger buyback plan expansion announced in October 2024 to include an additional 1 million shares authorized for repurchase under their ongoing strategy since 2013 to enhance shareholder value amidst stable dividend payouts of $0.21 per share scheduled for November payment.

• Click to explore a detailed breakdown of our findings in Univest Financial's valuation report.

• Review our historical performance report to gain insights into Univest Financial's's past performance.

Taking Advantage

• Click here to access our complete index of 51 Undervalued US Small Caps With Insider Buying.
• Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments.
• Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors.

Looking For Alternative Opportunities?

• 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com