Exploring Three Undervalued Small Caps With Insider Actions In The Market

editorial-team@simplywallst.com (Simply Wall St)

9 July 2024 at 9:04 am·4-min read

As global markets exhibit mixed signals with the S&P 500 reaching record highs and small-cap indices like the Russell 2000 showing slight declines, investors are navigating through a landscape shaped by fluctuating interest rates and economic indicators. In such a context, identifying undervalued small-cap stocks becomes crucial, especially those where insider actions suggest unrecognized potential amidst broader market movements.

Top 10 Undervalued Small Caps With Insider Buying

Name	PE	PS	Discount to Fair Value	Value Rating
Dundee Precious Metals	8.6x	3.0x	44.28%	★★★★★★
Norcros	7.8x	0.5x	43.78%	★★★★★☆
Tokmanni Group Oyj	16.8x	0.5x	38.77%	★★★★★☆
Primaris Real Estate Investment Trust	11.5x	3.0x	35.25%	★★★★★☆
Chatham Lodging Trust	NA	1.3x	17.34%	★★★★☆☆
Calfrac Well Services	2.4x	0.2x	4.72%	★★★☆☆☆
Ramaco Resources	13.8x	1.1x	12.35%	★★★☆☆☆
Papa John's International	19.5x	0.7x	37.22%	★★★☆☆☆
Community West Bancshares	18.7x	2.9x	42.25%	★★★☆☆☆
Delek US Holdings	NA	0.1x	-135.23%	★★★☆☆☆

Click here to see the full list of 225 stocks from our Undervalued Small Caps With Insider Buying screener.

We're going to check out a few of the best picks from our screener tool.

Semen Indonesia (Persero)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Semen Indonesia is a company that operates primarily in cement and non-cement production.

Operations: Cement Production and Non-Cement Production are the primary revenue streams for the company, generating IDR 34.11 billion and IDR 13.13 billion respectively. Over the years, Gross Profit Margin has shown a declining trend from 45.47% in late 2013 to around 25.72% by mid-2024, reflecting increasing costs relative to revenue.

PE: 13.6x

Recently, insider Donny Arsal demonstrated confidence in Semen Indonesia by acquiring 268,000 shares for IDR 1.00 billion, reflecting a significant stake increase of nearly 39%. This move came amidst the company's reported decline in Q1 earnings for 2024, where net income dropped to IDR 471.81 million from IDR 561.62 million year-over-year. Despite these figures, the firm is poised for a rebound with earnings expected to grow by approximately 13.5% annually. Presenting at the Macquarie Asia Conference and maintaining a regular dividend payout underscores its ongoing commitment to shareholder value and operational stability in challenging markets.

IDX:SMGR Share price vs Value as at Jul 2024

Marksans Pharma

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Marksans Pharma is a pharmaceutical company with a focus on the manufacture and marketing of formulation products, boasting a market capitalization of approximately ₹21.77 billion.

Operations: The pharmaceuticals segment generated a revenue of ₹21.77 billion, with a gross profit margin of 52.32% as of the most recent reporting period. This reflects an increase in cost efficiency, evidenced by a decrease in COGS to ₹10.38 billion from previous periods, while maintaining robust revenue levels.

PE: 27.0x

Marksans Pharma, reflecting a robust year with a 21.63% forecasted earnings growth, recently announced an uptick in annual revenue to INR 22.28 billion from INR 19.11 billion and a net income rise to INR 3.14 billion, up from INR 2.66 billion last year. Despite its volatile share price, the firm's consistent dividend increase—to INR 0.60 per share—signals strong insider confidence with recent strategic purchases by insiders bolstering this view further, showcasing their belief in the company’s growth trajectory and financial health.

NSEI:MARKSANS Ownership Breakdown as at Jul 2024

Dundee Precious Metals

Simply Wall St Value Rating: ★★★★★★

Overview: Dundee Precious Metals is a gold mining company with operations at Ada Tepe and Chelopech, boasting a market capitalization of approximately $1.10 billion.

Operations: Ada Tepe and Chelopech generated revenues of $243.33 million and $274.18 million respectively, with the company achieving a gross profit margin of 53.34% in its latest quarter, reflecting significant operational efficiency in managing production costs.

PE: 8.6x

Dundee Precious Metals, with its recent executive appointments and robust production forecasts for 2024, stands out in the mining sector. Insider confidence is reflected through recent share purchases, signaling strong belief in the company's prospects. Highlighting a commitment to growth, Dundee's leadership in gold and copper production is expected to continue strengthening. With strategic expansions like the Coka Rakita project poised for significant output and efficiency gains, Dundee exemplifies potential within underappreciated market segments.

TSX:DPM Share price vs Value as at Jul 2024

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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 IDX:SMGR NSEI:MARKSANS and TSX:DPM.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

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Top 10 Undervalued Small Caps With Insider Buying

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