In the last week, the United States market has stayed flat, yet it has seen a robust 23% increase over the past year with earnings anticipated to grow by 15% annually in the coming years. In this environment, identifying promising small-cap stocks that are perceived as undervalued can offer investors potential opportunities for growth, especially when there is notable insider activity signaling confidence in these companies' prospects.
Top 10 Undervalued Small Caps With Insider Buying In The United States
Overview: Sabre operates as a technology solutions provider focusing on the travel and hospitality industries, with a market cap of approximately $1.63 billion.
Operations: The company's revenue streams primarily include Travel Solutions and Hospitality Solutions, with Travel Solutions contributing the majority of revenue. The gross profit margin has shown variability, peaking at 81.41% in Q2 2020 but generally remaining above 50% in recent years. Operating expenses are a significant component of costs, with research and development being a notable expenditure.
PE: -4.3x
Sabre, a player in the travel technology sector, is experiencing insider confidence with recent share purchases. The company anticipates earnings growth of 72% annually, despite relying on higher-risk external borrowing for funding. Recent strategic partnerships with airlines like Hainan Airlines and Saudia showcase its commitment to enhancing global distribution capabilities. Sabre's third-quarter sales reached US$764 million, narrowing net losses from the previous year. These developments position Sabre as a potential candidate for investors interested in smaller companies with growth prospects.
Overview: Quanex Building Products is a manufacturer of components for the fenestration (windows and doors) and cabinet markets, with operations in North America and Europe, and a market capitalization of approximately $1.18 billion.
Operations: Quanex Building Products generates significant revenue primarily from its North American Fenestration and European Fenestration segments, with a notable contribution from North American Cabinet Components. The company's cost of goods sold (COGS) has been substantial, impacting its gross profit margin, which was 25.10% as of the latest reporting period. Operating expenses have also been a considerable part of the financial structure, including general and administrative expenses that reached $189.57 million in recent data.
PE: 32.9x
Quanex Building Products, a smaller U.S. company in the building materials sector, shows mixed signals for potential investors. Despite a 13% increase in sales to US$1.28 billion for the year ending October 2024, net income dropped significantly to US$33 million from US$82.5 million the previous year, with profit margins narrowing from 7.3% to 2.6%. The company completed repurchasing shares worth US$12.19 million under its buyback program but faces higher risk funding due to reliance on external borrowing without customer deposits. Earnings are projected to grow by over 49% annually, suggesting possible future growth despite current financial challenges and lower insider confidence indicated by no recent insider purchases.
Overview: ProPetro Holding is an oilfield services company primarily engaged in providing hydraulic fracturing and other related services, with a market capitalization of approximately $1.16 billion.
Operations: ProPetro Holding generates revenue primarily from its hydraulic fracturing segment, contributing significantly more than wireline services. The company's cost of goods sold (COGS) has been a substantial component of expenses, impacting the gross profit margin, which reached 32.18% as of June 2023.
PE: -7.0x
ProPetro is navigating its small-cap status with strategic moves in the energy sector, notably launching ProPWR to address rising power demands in the Permian Basin. Recent contracts for electric hydraulic fracturing services highlight their commitment to efficiency and growth. The company has repurchased over 12 million shares since May 2023, reflecting insider confidence. Despite a third-quarter net loss of US$137 million, earnings are projected to grow significantly at around 93% annually, suggesting potential for recovery and value creation.
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.
