The United Kingdom market has recently faced challenges, with the FTSE 100 and FTSE 250 indices closing lower amid weak trade data from China, highlighting global economic uncertainties. Despite these headwinds, small-cap stocks in the UK may present unique opportunities for investors, particularly those that show signs of insider buying and are considered undervalued.
Top 10 Undervalued Small Caps With Insider Buying In The United Kingdom
Overview: Breedon Group is a construction materials company that operates in the cement, aggregates, asphalt, and ready-mixed concrete markets with a market cap of approximately £1.32 billion.
Operations: Breedon Group's primary revenue streams come from its operations in Great Britain, Ireland, and Cement segments, with Great Britain generating the highest revenue at £1006.60 million. The company's cost of goods sold (COGS) significantly impacts its gross profit margins, which have shown variability over time but reached 36.23% as of June 2023. Operating expenses and non-operating expenses also play a substantial role in shaping the net income margin, which was 7.30% for the same period.
PE: 15.1x
Breedon Group, a small cap in the UK, reported half-year sales of £764.6 million as of June 30, 2024, up from £742.7 million the previous year. However, net income dropped to £34.1 million from £43.9 million a year ago. Despite this dip in profitability, insider confidence is evident with recent share purchases by company executives over the past six months. Earnings are projected to grow annually by 14%.
Overview: Domino's Pizza Group operates a network of franchise and corporate-owned pizza stores, generating income through sales to franchisees, corporate store operations, advertising and ecommerce, property rentals and various fees, with a market cap of £2.73 billion.
Operations: Domino's Pizza Group generates revenue primarily from sales to franchisees (£461 million), national advertising and e-commerce income (£85.5 million), and royalties, franchise fees, and change of hands fees (£82.4 million). The company has seen fluctuations in its net income margin, reaching as high as 18.28% in June 2023 before dropping to 11.44% by June 2024.
PE: 15.6x
Domino's Pizza Group, a prominent player in the UK market, has seen insider confidence with share purchases made from January to May 2024. The company repurchased 1.8 million shares for £6.2 million during this period and completed a total buyback of 25.3 million shares worth £90.1 million since May 2023. Despite a dip in H1 sales to £326.8 million and net income dropping to £42.3 million, Domino's maintains strategic momentum with projected growth in orders and like-for-like sales for fiscal year 2024.
Overview: Hochschild Mining is a precious metals company focusing on the exploration, mining, processing, and sale of silver and gold with key operations in Peru and Argentina, and it has a market cap of approximately £0.52 billion.
Operations: Hochschild Mining generates revenue primarily from its Inmaculada, San Jose, and Pallancata segments, with Inmaculada contributing the largest share. For the period ending September 30, 2023, the company reported a gross profit margin of 24.71%.
PE: -23.2x
Hochschild Mining, a small cap in the UK, has shown promising insider confidence with CEO Eduardo Navarro purchasing 148,000 shares worth £235,320 in July 2024. This purchase increased their stake by over 52%. The company reported mixed Q2 results: silver production dropped to 2.6 million ounces from 3 million ounces year-on-year, yet gold production rose to 66.37 thousand ounces from 54.12 thousand ounces. Hochschild reiterated its annual guidance of producing up to 360,000 gold equivalent ounces for the year.
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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:BREE LSE:DOM and LSE:HOC.
