The market has been flat in the last week but has risen 20% over the past 12 months, with earnings expected to grow by 15% per annum over the next few years. In this context, identifying undervalued small-cap stocks with insider action could present unique opportunities for investors looking to capitalize on potential growth.
Top 10 Undervalued Small Caps With Insider Buying In The United States
Overview: Gladstone Commercial is a real estate investment trust (REIT) focused on acquiring, owning, and operating net leased industrial and office properties across the United States with a market cap of approximately $0.73 billion.
Operations: Gladstone Commercial generates revenue primarily from its REIT - Commercial segment, amounting to $145.15 million. The company has shown a gross profit margin of 79.12% as of the latest period ending September 10, 2024, with operating expenses and non-operating expenses being significant cost components impacting net income margins.
PE: -467.9x
Gladstone Commercial has recently executed an 8-year lease extension with Elster Solutions and acquired a 50,102 square foot industrial facility in Midland, Texas, at a capitalization rate of 9.94%. The company reported Q2 revenue of US$37.06 million and net income of US$1.61 million, showing improvement from a net loss last year. Insider confidence is evident with notable share purchases over the past six months, suggesting potential for future stability despite current unprofitability projections over the next three years.
Overview: Industrial Logistics Properties Trust focuses on owning and leasing industrial and logistics properties, with a market cap of approximately $0.78 billion.
Operations: ILPT generates revenue primarily through ownership and leasing of properties, with a recent quarterly revenue of $441.89 million. The company's gross profit margin has shown slight fluctuations, most recently at 86.47%.
PE: -3.1x
Industrial Logistics Properties Trust, a small cap stock in the U.S., reported Q2 2024 sales of US$110.62 million, slightly up from US$108.04 million the previous year, with a net loss narrowing to US$23.18 million from US$25.83 million. Insider confidence is evident as they increased their holdings over the past six months. Despite interest payments not being well-covered by earnings, ILPT's inclusion in multiple Russell indices suggests potential for future growth and stability in its sector.
Overview: Chimera Investment operates by investing, on a leveraged basis, in a diversified portfolio of mortgage assets and has a market cap of approximately $1.56 billion.
Operations: The company's revenue primarily comes from investing in a diversified portfolio of mortgage assets, with recent quarterly revenue at $306.43 million. Operating expenses for the same period were $53.49 million, leading to a net income margin of 45.94%.
PE: 8.9x
Chimera Investment recently reported strong earnings for Q2 2024, with net income rising to US$56.66 million from US$36.02 million a year ago, and basic EPS increasing to US$0.42 from US$0.23. The company completed a $65 million fixed-income offering in August 2024, issuing callable senior unsecured notes with a 9.25% coupon rate due in 2029. Insider confidence is evident as insiders have been purchasing shares consistently over the past six months, signaling potential undervaluation and future growth prospects despite forecasted earnings decline by an average of 5.8% per year for the next three years.
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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.
