The United Kingdom's market has recently experienced turbulence, with the FTSE 100 closing lower due to weak trade data from China and broader global economic concerns. This environment has heightened interest in small-cap stocks, which can offer unique opportunities for growth despite broader market challenges. In this article, we will explore three undervalued small caps in the UK that have shown notable insider action, potentially indicating confidence from those with intimate knowledge of their operations.
Top 10 Undervalued Small Caps With Insider Buying In The United Kingdom
Overview: Domino's Pizza Group operates as a leading pizza delivery company with various revenue streams including sales to franchisees, corporate store income, advertising and ecommerce income, rental income on property, and royalties and franchise fees; the company's market cap is approximately £2.50 billion.
Operations: The company's primary revenue streams include sales to franchisees, corporate stores income, national advertising and e-commerce income, rental income on leasehold and freehold property, and royalties along with franchise fees. The gross profit margin has shown a trend of gradual increase over the years, reaching 46.48% in the latest period.
PE: 15.7x
Domino's Pizza Group, a smaller UK stock, is drawing attention due to its strategic share repurchases and insider confidence. From January to May 2024, the company repurchased 1.8 million shares for £6.2 million and completed a larger buyback of 25.3 million shares for £90.1 million since May 2023. Despite lower H1 sales (£326.8 million) and net income (£42.3 million), Domino's forecasts earnings growth of 9.73% annually while maintaining trading momentum into H2 2024 through strategic initiatives.
Overview: Sirius Real Estate is a property investment company specializing in the acquisition, development, and management of business parks and industrial complexes with a market cap of approximately €1.24 billion.
Operations: Sirius Real Estate generates revenue primarily from property investments, with a gross profit margin of 57.50%. As of the latest period, the company's net income margin stands at 37.25%.
PE: 16.5x
Sirius Real Estate recently completed a £152.5 million follow-on equity offering, issuing 159.6 million shares at £0.94 each to fund acquisitions in Germany and the UK. The company reported impressive earnings for the year ending March 31, 2024, with sales of €288.8 million and net income of €107.8 million, up from €79.6 million last year. Insider confidence is evident with recent share purchases by executives between June and July 2024, reflecting their belief in future growth prospects amidst ongoing dividend increases and strategic investments.
Overview: Wizz Air Holdings is a low-cost airline operating across Europe and parts of the Middle East with a market cap of approximately €2.50 billion.
Operations: Wizz Air Holdings generates revenue primarily from its entire route network, with recent figures showing €5095.8 million. The company has seen fluctuations in its gross profit margin, which currently stands at 22.49%. Operating expenses include significant costs such as depreciation and amortization (€828.5 million) and sales and marketing (€117.3 million).
PE: 5.1x
Wizz Air Holdings, a UK-based small-cap airline, has shown mixed financial results recently. For the first quarter ending June 30, 2024, revenue rose slightly to €1.26 billion from €1.24 billion last year, but net income dropped sharply to €5.8 million from €62.8 million. Despite this, the company expects improved performance in fiscal year 2025 with projected net income between €350 million and €450 million and load factors around 92%. Insider confidence is evident as executives have been purchasing shares consistently over the past six months.
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:SRE and LSE:WIZZ.
