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As global markets react positively to the Federal Reserve's announcement of impending rate cuts, small-cap stocks have been outperforming their larger counterparts, with indices like the S&P 600 showing notable gains. This environment presents an opportune moment to explore undervalued small-cap stocks, particularly those that have seen insider buying—a potential indicator of confidence in future performance. In this context, identifying promising small-cap stocks involves looking for companies with strong fundamentals and recent insider transactions.
Top 10 Undervalued Small Caps With Insider Buying
| Name | PE | PS | Discount to Fair Value | Value Rating |
|---|---|---|---|---|
| Hanover Bancorp | 9.1x | 2.1x | 49.12% | ★★★★★☆ |
| Essentra | 849.8x | 1.6x | 47.16% | ★★★★★☆ |
| Cabka | NA | 0.4x | 49.42% | ★★★★★☆ |
| Hemisphere Energy | 6.1x | 2.4x | 7.23% | ★★★★☆☆ |
| Information Services | 23.2x | 2.0x | -62.03% | ★★★★☆☆ |
| Sagicor Financial | 1.4x | 0.3x | -44.91% | ★★★★☆☆ |
| German American Bancorp | 14.4x | 4.8x | 44.75% | ★★★☆☆☆ |
| Franchise Brands | 116.8x | 2.9x | 48.85% | ★★★☆☆☆ |
| Community West Bancshares | 18.7x | 2.9x | 42.25% | ★★★☆☆☆ |
| Industrial Logistics Properties Trust | NA | 0.7x | -254.82% | ★★★☆☆☆ |
Below we spotlight a couple of our favorites from our exclusive screener.
Wizz Air Holdings
Simply Wall St Value Rating: ★★★☆☆☆
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, amounting to €5.10 billion for the latest period. The company's gross profit margin has shown variability, reaching 22.49% recently.
PE: 5.2x
Wizz Air Holdings, a small-cap airline, has shown mixed financial performance recently. For the first quarter ending June 30, 2024, revenue slightly increased to €1.26 billion from €1.24 billion year-on-year, but net income dropped significantly to €5.8 million from €62.8 million. Despite volatile share prices and reliance on higher-risk external borrowing for funding, insider confidence is evident with recent purchases in July 2024. The company forecasts earnings growth of 20.78% annually and expects load factors of 92% for fiscal year 2025.
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Take a closer look at Wizz Air Holdings' potential here in our valuation report.
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Understand Wizz Air Holdings' track record by examining our Past report.
MaxLinear
Simply Wall St Value Rating: ★★★★☆☆
Overview: MaxLinear is a company that designs, develops, and sells semiconductors with a market cap of approximately $2.32 billion.
Operations: MaxLinear generates revenue primarily from its semiconductor segment, with recent figures showing $448.14 million. The company has experienced fluctuating net income margins, recently reporting a net income margin of -42.38% for the latest period ending June 30, 2024. Gross profit margins have varied over time, currently at 53.99%.