As global markets navigate a challenging landscape marked by easing U.S. inflation and ongoing trade policy uncertainties, small-cap stocks have faced significant headwinds, with indices like the Russell 2000 experiencing notable declines. Despite these pressures, opportunities may arise for investors seeking value in small-cap companies that demonstrate resilience and potential growth amid economic fluctuations.
Top 10 Undervalued Small Caps With Insider Buying Globally
Overview: Kier Group is a UK-based construction and infrastructure services company with operations in property, corporate, construction, and infrastructure services segments, holding a market cap of £0.26 billion.
Operations: The company generates revenue primarily from its Construction (£1.92 billion) and Infrastructure Services (£2.08 billion) segments. Over recent periods, the gross profit margin has shown variability, peaking at 10.12% in June 2018 before declining to 8.03% by December 2024. Operating expenses have consistently been a significant component of costs, with general and administrative expenses making up a substantial portion of these operating costs across the periods reviewed.
PE: 10.5x
Kier Group, operating in the construction sector, is experiencing insider confidence with share purchases indicating potential growth. The company reported a sales increase to £1.97 billion for the half year ending December 2024, alongside a net income rise to £20.4 million. A 20% interim dividend hike reflects financial health despite higher risk funding from external borrowing. Recently announced share repurchases aim to return capital to shareholders, enhancing its attractiveness in this investment category.
Overview: Marshalls is a UK-based company specializing in the manufacturing and supply of products for the landscaping, building, and roofing sectors, with a market capitalization of approximately £1.20 billion.
Operations: The company generates revenue primarily from its Roofing, Building, and Landscaping products. Over the years, it has experienced fluctuations in net income margin, with a notable decrease during 2020 but subsequent recovery observed by 2024. Gross profit margin reached a peak of 64.18% in late 2024 and early 2025. Operating expenses have consistently been a significant portion of costs, with general and administrative expenses being a major component within this category.
PE: 19.5x
Marshalls, a company with exclusively external borrowing, reported a sales dip to £619.2 million for 2024 from £671.2 million the previous year but saw net income rise to £31 million from £18.6 million. Earnings per share increased significantly, reflecting potential growth despite funding risks. Recent insider confidence was evident as insiders made notable stock purchases over the past six months, suggesting optimism about future prospects amidst their expansion into Vancouver's retail market on March 18, 2025.
Overview: Wajax is a Canadian company specializing in the distribution and service of industrial equipment and machinery, with a market capitalization of approximately CA$0.48 billion.
Operations: The company generates revenue primarily from wholesale operations in machinery and industrial equipment, with a recent quarterly revenue of CA$2.10 billion. The cost of goods sold (COGS) significantly impacts the gross profit, which stood at CA$413.78 million for the latest period. Operating expenses are a notable expense category, amounting to CA$311.52 million in the same period, while non-operating expenses were reported at CA$59.47 million. The net income margin was 2.04%, indicating that after all costs and expenses, this percentage of revenue translates into profit for shareholders.
PE: 9.0x
Wajax, a smaller company in the industrial sector, has seen its net profit margin decrease to 2% from last year's 3.8%, indicating some financial pressure. Despite sales dropping slightly to C$2.1 billion for the year ending December 2024, insider confidence is evident with recent share purchases by insiders. The company's earnings per share have halved compared to last year, yet it continues paying a quarterly dividend of C$0.35 per share. Future growth may depend on improving its financial position and managing external borrowings effectively.
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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:KIE LSE:MSLH and TSX:WJX.
