The market is up 2.9% in the last 7 days, with all sectors gaining ground. Over the past 12 months, the market is up 17%, and earnings are forecast to grow by 15% annually. In this favorable environment, identifying undervalued small-cap stocks with insider buying can present compelling opportunities for investors seeking growth potential.
Top 10 Undervalued Small Caps With Insider Buying In The United States
Overview: Gladstone Commercial is a real estate investment trust (REIT) that focuses on acquiring, owning, and managing commercial properties, with a market cap of approximately $0.72 billion.
Operations: Gladstone Commercial generates revenue primarily from its REIT - Commercial segment, with a gross profit margin of 79.12% as of the latest reporting period. The company incurs significant operating expenses and non-operating expenses, including depreciation and amortization (D&A), which impacts its net income.
PE: -441.0x
Gladstone Commercial, a small U.S. company, reported Q2 2024 earnings with sales of US$37.06 million and net income of US$1.61 million, reversing a previous year's loss. Despite revenue dips from US$38.66 million to US$37.06 million year-over-year, insider confidence is evident with recent share purchases from July to August 2024. The company also announced steady preferred dividends for Series E, F, and G stocks through September 2024, reflecting consistent cash flow management amidst external borrowing risks.
Overview: Ramaco Resources is a company engaged in the production and sale of metallurgical coal with operations primarily focused on mining.
Operations: Ramaco Resources generates revenue primarily from its Metals & Mining - Coal segment, with the latest reported revenue of $717.69 million. The company has seen fluctuations in gross profit margin, which was 23.85% as of the most recent period ending June 30, 2024. Operating expenses and cost of goods sold (COGS) are significant components impacting overall profitability, with COGS at $546.53 million and operating expenses at $109.14 million for the same period.
PE: 12.8x
Ramaco Resources, a small-cap company, reported Q2 2024 sales of US$155.32 million, up from US$137.47 million the previous year, but net income fell to US$5.54 million from US$7.56 million. For the first half of 2024, sales reached US$328 million while net income dropped significantly to US$7.57 million from last year's US$32.81 million due to higher operational costs and lower profit margins (7.6% vs 12.8%). The company expects full-year production between 3.8-4.2 million tons and sales of 4-4.4 million tons despite being dropped from several Russell indexes on July 1st but added to growth-focused ones like Russell Microcap Growth Index on the same date. Insider confidence is evident with recent share purchases by executives over the past six months indicating faith in long-term prospects amidst ongoing leadership realignment aimed at supporting growth milestones and new projects such as rare earth mineral development in Wyoming.
Overview: Chimera Investment operates by investing on a leveraged basis in a diversified portfolio of mortgage assets, with a market cap of approximately $1.55 billion.
Operations: The company's revenue is primarily derived from investing in a diversified portfolio of mortgage assets. Over the periods examined, net income margin has shown significant fluctuations, with notable declines into negative territory in 2020 and 2022. Gross profit margins have generally remained high, often exceeding 90%. Operating expenses are consistently recorded under general and administrative expenses.
PE: 8.2x
Chimera Investment, a small cap stock in the U.S., recently reported strong earnings with net income for Q2 2024 at US$56.66 million, up from US$36.02 million a year ago. Basic earnings per share rose to US$0.42 from US$0.23 in the same period last year. Despite a reverse stock split and increased dividends, insider confidence remains high with recent purchases indicating potential value recognition within the company’s strategic framework and future growth prospects.
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.
