The European market has recently seen a boost in sentiment, with the pan-European STOXX Europe 600 Index rising by 2.10% following a de-escalation in U.S.-China trade tensions. As major indices like Germany's DAX and Italy's FTSE MIB show gains, investors are increasingly interested in small-cap stocks that demonstrate strong fundamentals and potential for growth amidst improving economic conditions.
Top 10 Undervalued Small Caps With Insider Buying In Europe
Overview: Investment AB Spiltan is a Swedish investment company that focuses on long-term investments in listed and unlisted companies, with a market capitalization of approximately SEK 9.93 billion.
Operations: Investment AB Spiltan generates revenue primarily through its services, with recent financial data indicating fluctuations in revenue and net income. The company has consistently reported a gross profit margin of 100%, suggesting that it incurs no cost of goods sold. Operating expenses have varied over time, with general and administrative expenses forming a significant part of these costs. Notably, the net income margin has shown variability, reaching as high as 98.78% in some periods while experiencing negative margins during others.
PE: -106.0x
Investment AB Spiltan, a small company in Europe, faces challenges with declining earnings and negative revenue of SEK 377.32 million for Q1 2025, compared to SEK 322.39 million the previous year. Despite this, insider confidence is evident through recent share purchases by executives in early May 2025. The company's reliance on external borrowing as its sole funding source adds risk but also potential for strategic growth if effectively managed.
Overview: Cloetta is a Swedish confectionery company specializing in pick & mix and packaged branded goods, with a market cap of approximately SEK 5.6 billion.
Operations: The company's revenue primarily comes from packaged branded goods, contributing significantly to its total income. Over recent periods, the gross profit margin showed a decreasing trend, reaching 31.30% by December 2024 and slightly recovering to 33.93% by March 2025. The cost of goods sold (COGS) has been a substantial expense, impacting the overall profitability alongside operating expenses like sales and marketing and general administrative costs.
PE: 15.3x
Cloetta's recent performance highlights its potential as an undervalued player in the European market. For Q1 2025, it reported sales of SEK 2,039 million and a significant net income increase to SEK 253 million from SEK 107 million last year. Insider confidence is evident with recent share purchases, indicating belief in future growth. Despite relying solely on external borrowing for funding, the company approved a higher dividend policy and projects earnings growth at 2.19% annually.
Overview: Hoist Finance is a financial services company specializing in the acquisition and management of non-performing loan portfolios, with a market cap of SEK 2.15 billion.
Operations: Hoist Finance generates revenue primarily from unsecured and secured segments, with the majority coming from unsecured sources. The company's net income margin has shown fluctuations, reaching 20.64% as of March 2025. Operating expenses are significant, with general and administrative expenses being a major component. Gross profit margins have experienced variability over time, standing at 69.44% in March 2025.
PE: 9.1x
Hoist Finance, a smaller European financial player, has caught attention with insider confidence as Executive Chairman Lars Wollung acquired 518,270 shares for approximately SEK 36.98 million in recent months. Despite high debt levels and reliance on external borrowing, the company shows potential with an expected annual earnings growth of 20.62%. Recent dividends and share repurchases indicate shareholder value focus. However, leadership changes may introduce uncertainty in the short term.
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.
Companies discussed in this article include NGM:SPLTN OM:CLA B and OM:HOFI.
