Exploring Undervalued Small Caps with Insider Activity in the United States July 2024

As the broader U.S. market faces a recession and major indexes like the S&P 500 and Russell 2000 experience sharp declines, small-cap stocks are also feeling the pressure. Given this challenging environment, identifying undervalued small-cap stocks that show potential for resilience or growth becomes especially compelling.

Top 10 Undervalued Small Caps with Insider Buys in the United States

Name	PE	PS	Discount to fair value	Value assessment
Hanover Bank Corp	9.0x	2.1x	45.23%	★★★★★☆
Ramaco Resources	13.9x	1.1x	12.91%	★★★★★☆
Thryv Farms	ON	0.7x	28.06%	★★★★★☆
AtriCure	ON	2.9x	45.43%	★★★★★☆
Columbus McKinnon	22.7x	1.0x	45.84%	★★★★★☆☆
Franklin Financial Services	9.3x	1.9x	34.57%	★★★★★☆☆
Citizens and the North	13.2x	3.0x	37.27%	★★★☆☆☆
West Bancshares Community	18.7x	2.9x	42.25%	★★★☆☆☆
Alta Equipment Group	ON	0.2x	-223.48%	★★★☆☆☆
Delek US Holdings	ON	0.1x	-120.10%	★★★☆☆☆

Click here to see the full list of the 70 stocks in our US Small-Cap Undervalued Stocks with Insider Buyers Screener.

Below are some of our favorites from our exclusive roundup.

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Hertz Global Holdings operates as a vehicle rental company primarily through two segments, Americas RAC and International RAC, with a market capitalization of approximately $5.27 billion.

Operations: Americas RAC and International RAC generated revenues of $7.73 billion and $1.67 billion, respectively, underscoring the significant geographic spread of earnings. The company’s gross profit margin showed volatility over the periods, with the latest figure at the last reporting date being 25.10%, indicating the proportion of revenues exceeding direct costs of goods sold.

PE: 5.4x

In the face of challenges, Hertz Global Holdings has shown signs of strategic rebirth with recent executive appointments aimed at driving operational efficiency and profitability. Despite its recent decline from several Russell indices, the company was added to the Russell 2000 on July 1, 2024. This inclusion underscores its potential as an undervalued player in the market. Insider confidence is evident as they have recently bought shares, signaling confidence in the company’s direction and a management overhaul. Additionally, Hertz’s financial maneuvers include exploring a significant debt sale to improve liquidity following setbacks with its electric vehicle investments. These strategic changes suggest a focused path forward for this veteran transportation player.

Simply Wall St Value Rating: ★★★★★☆☆

Overview: Byline Bancorp is a bank holding company whose primary business activity is the provision of banking products and services, with a market capitalization of approximately $1.2 billion.

Operations: Banking operations generate a consistent gross profit margin of 100%, with revenues increasing to $366.62 million. Net income increased, reflecting an improvement in net income margin to approximately 31.20%.

PE: 10.8x

Byline Bancorp showed notable growth in net interest income and net income, as evidenced by first-quarter results, in which revenue rose to $85.54 million from $75.72 million year over year, and net income increased to $30.44 million from $23.95 million. Despite an average forecast earnings decline of 1.6% over the next three years, insider confidence remains strong, with recent stock purchases signaling positive internal expectations for future growth and stability in the context of the financial sector.

Simply Wall St Value Rating: ★★★★★☆

Overview: Provident Financial Services is a financial institution offering traditional banking and other financial services with a market capitalization of approximately $1.22 billion.

Operations: The company has consistently generated a gross profit margin of 100%, indicating that all revenues are effectively contributing to gross profit since COGS is not applicable. Net income margins have been volatile in recent periods but have remained solid, peaking at 35.57% in Q1 2019 and settling to lower levels of around 27.19% by Q3 2024.

PE: 11.1x

Provident Financial Services, which is expected to see its earnings grow by 54.74% annually, recently strengthened its strategic positioning with a $40.78 million common stock registration statement and a board shakeup — indicating a dynamic management approach aimed at strengthening oversight and execution of the strategy. Insiders’ confidence is evident as they recently bought shares, signaling confidence in the company’s growth trajectory amid these events. This is consistent with the completion of a $225 million fixed-income offering, underscoring financial strength and market confidence.

To sum it all up

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This Simply Wall St article is for general information purposes only. 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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