In recent weeks, global markets have faced a series of economic surprises that have sent shares lower and stalled the rotation toward value stocks and small-caps. The Russell 2000 Index, which tracks smaller companies, pulled back sharply amid these developments, reflecting heightened market volatility and investor caution. In such an environment, identifying undervalued small-cap stocks with insider buying can be particularly compelling for investors seeking opportunities.
Overview: Corbion is a global food and biochemicals company specializing in sustainable food solutions, lactic acid and specialties, algae ingredients, and non-core activities with a market cap of approximately €1.95 billion.
Operations: The company's revenue streams include Non-Core (€179.80M), Algae Ingredients (€111.40M), Lactic Acid & Specialties (€383.90M), and Sustainable Food Solutions (€768.70M). The gross profit margin has shown varying trends, with the most recent value being 22.96%.
PE: 17.2x
Corbion, a small-cap company, reported half-year sales of €637.1 million and net income of €168.4 million as of June 30, 2024. Their earnings per share from continuing operations increased to €0.39 from €0.26 a year ago, showcasing significant profitability growth despite slightly lower sales compared to last year. Insider confidence is evident with recent share purchases between April and July 2024 totaling 992,483 shares for €20 million. Earnings are forecasted to grow by 18% annually, indicating potential future value despite their reliance on higher-risk external funding sources.
Overview: Vimeo is a video software company that provides tools for creating, editing, and sharing high-quality videos, with a market cap of approximately $0.93 billion.
Operations: The company's primary revenue stream is from Internet Software & Services, generating $421.08 million. It has a gross profit margin of 78.37% and recorded a net income of $32.39 million for the period ending June 30, 2024.
PE: 24.6x
Vimeo's recent earnings report for Q2 2024 showed a solid performance with sales reaching US$104.38 million, up from US$101.84 million last year, and net income doubling to US$10.12 million. Basic earnings per share increased to US$0.06 from US$0.04 a year ago. The company has also launched an AI-powered video translation solution, promising significant cost and time savings for businesses aiming to reach global audiences efficiently. Insider confidence is evident with key executives purchasing shares in the past six months, reflecting their belief in Vimeo’s growth potential despite recent index drops and reliance on external borrowing for funding.
Overview: Chimera Investment is a real estate investment trust that primarily invests in residential mortgage-backed securities and has a market cap of approximately $1.51 billion.
Operations: Chimera Investment's revenue streams are primarily derived from its core operations, with significant fluctuations in net income margins over the observed periods. Notably, the company's gross profit margin has varied, reaching as high as 1.52% and experiencing a low of 0.51%. The operating expenses have remained within a range of $33.25 million to $73.32 million across different quarters, impacting overall profitability.
PE: 8.4x
Chimera Investment Corporation, a small-cap stock, reported significant earnings growth for Q2 2024, with net income rising to US$56.66 million from US$36.02 million year-over-year and basic EPS increasing to US$0.42 from US$0.23. Despite no customer deposits and reliance on external borrowing, the company maintains a solid financial position. Recent insider confidence is evident with purchases made in the past six months, signaling potential undervaluation amidst steady dividend payouts and strategic stock splits executed in May 2024.
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.
