The United Kingdom market has recently faced challenges, with the FTSE 100 closing lower due to weak trade data from China and broader global economic concerns. Despite these headwinds, investors often seek opportunities in undervalued small-cap stocks, especially those with insider buying, as they can provide potential growth even in uncertain times.
Top 10 Undervalued Small Caps With Insider Buying In The United Kingdom
Overview: Domino's Pizza Group operates a network of franchise and corporate-owned pizza stores, generating income from sales to franchisees, advertising and ecommerce, rental properties, and various fees; it has a market cap of approximately £1.50 billion.
Operations: The company generates revenue primarily from sales to franchisees, corporate stores income, national advertising and ecommerce income, rental income on leasehold and freehold property, and royalties and franchise fees. Notably, the gross profit margin has seen fluctuations over the years with a recent figure of 47.48% as of June 2024.
PE: 15.3x
Domino's Pizza Group, a small cap in the UK, recently announced share repurchases starting August 6, 2024. The company aims to buy back up to 39.5 million shares by August 1, 2025. Despite reporting lower sales (£326.8 million) and net income (£42.3 million) for H1 2024 compared to last year, Domino’s remains optimistic about growth in order count and like-for-like sales for the rest of the fiscal year.
Overview: Hochschild Mining is a precious metals company focused on the exploration, mining, processing, and sale of gold and silver with a market cap of approximately £0.68 billion.
Operations: Hochschild Mining generates revenue primarily from its Inmaculada, San Jose, and Pallancata segments. The company's gross profit margin has fluctuated over the periods, reaching a high of 42.85% in Q2 2021 and a low of 8.08% in Q2 2015. Operating expenses include significant allocations to general & administrative costs and non-operating expenses.
PE: -20.6x
Hochschild Mining, a small UK-based mining company, has recently shown promising insider confidence with Eduardo Navarro purchasing 148,000 shares in July 2024 for £235,320. The company reiterated its 2024 production guidance of up to 360,000 gold equivalent ounces. Despite a slight dip in silver production from the previous year’s quarter (2,589 koz vs. 2,955 koz), gold output increased to 66.37 koz from last year's 54.12 koz. With earnings forecasted to grow by nearly 54% annually and the recent insider activity indicating strong internal belief in future prospects, Hochschild appears poised for potential growth within its industry context.
Overview: Sirius Real Estate is a property investment company specializing in owning and managing business parks, industrial complexes, and office spaces with a market cap of approximately €1.50 billion.
Operations: Sirius Real Estate generates revenue primarily through property investments, with recent figures showing a gross profit margin of 57.50%. The company incurs significant costs, including COGS and operating expenses, which impact its net income margins.
PE: 15.7x
Sirius Real Estate has shown promising growth with earnings forecasted to increase 16.13% annually. However, its debt is not well covered by operating cash flow, and shareholders experienced dilution over the past year. Highlighting insider confidence, Asset Management Director Craig Hoskins purchased 218,283 shares worth £216,122 in recent months. The company recently raised £152 million through equity offerings to support acquisitions in Germany and the U.K., aiming to boost annual FFO towards a €150 million target.
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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 LSE:DOM LSE:HOC and LSE:SRE.
