A Study of Three Undervalued Small-Cap Companies with Insider Activities in the United States

Recent market activity has shown a significant increase, with the Russell 2000 Index, a barometer of small-cap stocks, posting significant gains. This gain reflects broader market optimism, driven by falling inflation and expectations of potential rate cuts. In such an environment, identifying undervalued small-cap stocks with positive insider activity can offer intriguing opportunities for savvy investors.

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

Name	PE	PS	Discount to fair value	Value assessment
Hanover Bank Corp	8.9x	2.0x	45.48%	★★★★★☆
Thryv Farms	Not applicable	0.7x	25.75%	★★★★★☆
Columbus McKinnon	23.0x	1.1x	45.12%	★★★★★☆☆
PCB Bank Handlowy	10.1x	2.7x	37.55%	★★★★★☆☆
Titanium Machines	4.2x	0.1x	19.72%	★★★★★☆☆
Chatham Lodging Foundation	Not applicable	1.4x	12.68%	★★★★★☆☆
Papa John’s International	19.6x	0.7x	36.53%	★★★☆☆☆
Delek US Holdings	Not applicable	0.1x	-129.24%	★★★☆☆☆
West Bancshares Community	18.7x	2.9x	42.25%	★★★☆☆☆
Alta Equipment Group	Not applicable	0.2x	-236.16%	★★★☆☆☆

Click here to see the complete list of 68 stocks in our US Small Cap Undervalued Stocks Screener with information on company insider purchasing.

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 its Rent-A-Car (RAC) segments in North and South America and internationally, and has a market capitalization of approximately $4.37 billion.

Operations: Americas RAC and International RAC generated revenues of $7.73 billion and $1.67 billion, respectively, reflecting the geographic distribution of the company’s revenues. Gross profit margin for the most recent period was 12.56%, which is the percentage of revenues exceeding cost of goods sold before operating expenses.

PE: 5.9x

Hertz Global Holdings has recently shown signs of strategic revival, highlighted by key executive appointments aimed at increasing operational efficiency and profitability. The move comes as the company is set to be added to the Russell 2000 Index on July 1, 2024, reflecting its small-cap status. Despite challenges like high debt and a volatile stock price, insider confidence is evident from recent purchases by executives who are betting on the company’s turnaround strategy. These factors make Hertz an intriguing prospect for those looking at potentially undervalued stocks ripe for recovery.

Simply Wall St Value Rating: ★★★★★☆☆

Overview: Leggett & Platt is a diversified manufacturing company that produces a wide range of components and engineered products used in homes, offices, automobiles, and commercial aircraft. It has a market capitalization of approximately $4.65 billion.

Operations: The company generates revenue from three main segments: Bedding Products, Specialty Products, and Furniture, Flooring & Textile Products, with revenues of $1.91 billion, $1.28 billion, and $1.46 billion, respectively. Gross profit margin showed a trend fluctuation during the periods under review, with the latest data from 2024-07-17 standing at around 17.83%.

PE: -10.9x

Leggett & Platt, a well-known player in the small-cap space, has recently shown resilience despite market volatility. With earnings forecast to grow 40.11% annually and insider confidence underscored by recent acquisitions, the stability of the company’s management team is reinforced by the reappointment of Karl G. Glassman as CEO. Despite challenges, such as a significant dividend cut and lower sales in the first quarter of 2024, strategic acquisition plans signal the potential for future revenue streams and shareholder returns.

Simply Wall St Value Rating: ★★★★★☆☆

Overview: Provident Financial Services is a financial services company offering traditional banking and other financial services with a market capitalization of approximately $1.2 billion.

Operations: This entity generates revenue through traditional banking and other financial services, achieving a net profit margin of 27.19% in the most recent quarter on revenue of $441.20 million. It has consistently reported a gross profit margin of 100% over the past decade, indicating that the cost of goods sold directly related to generating revenue is immaterial or not reported.

PE: 11.3x

Provident Financial Services, with its recent $40.78 million shelf registration for common stock and solid management shake-up, signals strategic agility amid market changes. Its $425 million fixed income offerings in May underscore a strengthened balance sheet, essential for future ventures. Insider confidence is evident as they recently bought shares, underscoring their belief in the company’s trajectory. This activity, combined with its projected 54.74% annual earnings growth, positions Provident as a compelling player in the undervalued sector in which it operates.

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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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