An exploration of the three largest undervalued small-cap companies with insider activity in the region

In a relatively quiet week on global markets, U.S. small-cap stocks and technology sectors showed noteworthy performance, outperforming their larger peers as investors adjusted positions ahead of quarterly earnings reports. This context creates an intriguing stage for exploring undervalued small-cap stocks, especially those whose recent insider activity suggests potential below-the-radar value in these turbulent times.

Top 10 Undervalued Small Companies with Insider Buying

Name	EP	PS	Discount to fair value	Value assessment
Tokmanni Oyj Group	16.7x	0.5x	39.47%	★★★★★★
Nexus Industrial REIT	2.4x	3.0x	20.97%	★★★★★★
Guardian Capital Group	10.4x	4.0x	32.47%	★★★★☆☆
CVS Group	20.4x	1.1x	43.29%	★★★★★☆☆
Sagicor Financial	1.2x	0.4x	-95.33%	★★★★☆☆
Trican Well Service	8.4x	1.0x	-18.11%	★★★☆☆☆
Papa John’s International	20.8x	0.7x	34.05%	★★★☆☆☆
West Bancshares Community	18.7x	2.9x	42.25%	★★★☆☆☆
Your own royalties	15.2x	6.6x	49.15%	★★★☆☆☆
Alta Hardware Group	ON	0.1x	-147.37%	★★★☆☆☆

Click here to see the full list of 224 stocks in our Insider Undervalued Small Cap Screener.

We’ll take a look at some of the top picks from our selection tool.

Simply Wall St Value Rating: ★★★★★☆☆

Overview: Mapa Aktif Adiperkasa operates in retail and non-retail businesses, mainly in Indonesia, with a market capitalization of approximately IDR 12.80 billion.

Operations: Retail and non-retail sales generate combined revenues of IDR 14.60 billion for the company, with a noticeable increase in gross profit margin from 39.56% at the end of 2015 to 47.36% in mid-2024, reflecting improved cost management during the periods under review.

PE: 15.8x

Reflecting the strong insider confidence, Miquel Staal recently acquired 3.7 million shares in Map Aktif Adiperkasa for IDR 2.96 billion, underlining his confidence in the company’s potential despite its reliance on higher-risk external borrowing. With a significant increase in sales to IDR 3.69 billion and an increase in net income to IDR 281 million, as reported in the latest quarterly results, the company shows promising growth prospects. This financial growth is in line with the earnings forecast of an annual growth rate of 18.3%, positioning Map Aktif Adiperkasa as an attractive player in its sector for those looking for undervalued market opportunities.

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Kinetic Development Group is a diversified business company with a market capitalization of approximately CN¥1.23 billion.

Operations: The company’s revenue increased from CN¥102.90 million in 2013 to CN¥4,745.07 million by the end of 2024, while the gross profit margin significantly increased from 9.05% to 59.07% during the same period. This growth trajectory is marked by the increasing net income margin, which turned positive and increased to 43.79% by the last recorded date, reflecting increased profitability and operational efficiency.

PE: 4.3x

Kinetic Development Group, reflecting its strategic stance in its sector, recently strengthened its governance framework and dividend policy amid market volatility. On May 7, 2024, it revised its corporate articles of association to enhance operational flexibility and declared a modest final dividend of HK$0.05 per share for the fiscal year ended December 31, 2023. Insider confidence is evident as it recently bought shares, signaling confidence in the company’s potential despite the external financing risk highlighted in its financial structure. Given these developments and its upcoming Q1 results, due May 31, Kinetic looks poised for some interesting momentum going forward.

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Hammond Power Solutions specializes in the manufacturing and sale of transformers and has a market capitalization of approximately Canadian $120 million.

Operations: The company’s gross profit margin shows an increasing trend, reaching 32.49% in the recent period, compared to previous years. This improvement reflects more effective management of production costs in relation to revenues from the production and sale of transformers, which amounted to CAD 729.61 million in the last reporting period.

PE: 23.9x

Hammond Power Solutions, a lesser-known unit in the market, recently showed its financial resilience despite a difficult quarter. With first-quarter sales rising to C$190.68 million from C$171.13 million year over year and net income of C$7.95 million, down from C$15.73 million a year ago, the numbers reflect mixed financial health but an upward revenue trajectory. Insiders’ confidence was evident as they recently bought shares, signaling belief in long-term value despite current earnings volatility. The company’s reliance on external borrowing underscores a riskier but necessary growth strategy that is expected to grow 18.59% annually.

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This article on Simply Wall St is of a general nature. Our commentary is based solely on historical data and analyst forecasts, and is based on an objective methodology. Our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamental data. Please note that our analysis may not reflect the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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