The United Kingdom's market has recently faced headwinds, with the FTSE 100 and FTSE 250 indices closing lower amid weak trade data from China, highlighting concerns over global economic stability. Despite these challenges, discerning investors often seek opportunities in undervalued small-cap stocks with notable insider activity, as these can offer potential for growth even in uncertain times.
Top 10 Undervalued Small Caps With Insider Buying In The United Kingdom
Overview: CVS Group operates veterinary practices, laboratories, an online retail business, and crematorium services with a market cap of approximately ￡1.35 billion.
Operations: Revenue streams include Veterinary Practices (￡573 million), Online Retail Business (￡49.6 million), Laboratories (￡31.4 million), and Crematorium services (￡11.6 million). The company has seen a gross profit margin trend, peaking at 52.31% in December 2014 and most recently at 43.11% in December 2023, with notable fluctuations over the periods analyzed. Operating expenses have consistently been a significant portion of the cost structure, impacting net income margins which reached their highest at 6.89% in June 2023 before slightly decreasing to 5.51% by December 2023.
PE: 23.5x
CVS Group, a small UK-based company, has recently seen insider confidence with David Wilton purchasing 2,500 shares worth ￡26,300 in June 2024. This purchase represents a significant 38% increase in their shareholding. Despite high levels of debt and reliance on external borrowing, the company's earnings are forecast to grow by 12% annually. The recent resignation of Executive Director Ben Jacklin has led to senior members assuming his responsibilities. These factors suggest potential for future growth amidst current undervaluation concerns.
Overview: Hammerson is a property development and investment company that focuses on flagship destinations in the UK, France, and Ireland, with a market cap of approximately ￡1.18 billion.
Operations: Hammerson generates revenue primarily from its flagship destinations in the UK, France, and Ireland. The company has experienced fluctuations in net income margin, reaching a high of 1.9371% and a low of -7.8977%. Gross profit margins have ranged between 79.80% and 87.52%.
PE: -34.5x
Hammerson's current positioning in the market highlights its potential as an undervalued stock. Despite reporting a net loss of ￡516.7 million for H1 2024, the company has taken strategic steps to strengthen its financial standing, including arranging a €350 million term loan with PIMCO Prime Real Estate. Insider confidence is evident from recent share purchases by executives over the past six months. Additionally, Hammerson declared an interim dividend of ￡0.00756 per share payable on 30 September 2024, reflecting ongoing commitment to shareholder returns amidst challenging times.
Overview: Rank Group operates a variety of gaming and betting venues, including Mecca bingo halls, Grosvenor casinos, and Enracha clubs, with a market cap of approximately ￡0.55 billion.
Operations: Rank Group generates revenue from Mecca, Digital, Enracha Venues, and Grosvenor Casinos. The company has experienced fluctuations in its net income margin over the years, with recent figures showing a net income margin of 0.0167% as of September 2024. Gross profit margins have varied but are currently at 43.08%.
PE: 29.8x
Rank Group, a small cap in the UK, has shown promising signs of being undervalued. For the year ending June 30, 2024, Rank reported sales of ￡734.7 million and net income of ￡12.5 million, recovering from a previous net loss of ￡96.2 million. CFO Richard Harris demonstrated insider confidence by purchasing 102,100 shares worth approximately ￡77,637 in recent months. With earnings forecasted to grow at 35.68% annually and no customer deposits contributing to liabilities—relying solely on external borrowing—the company presents an intriguing investment opportunity despite its higher risk funding structure.
Are you invested in these stocks already? Keep abreast of every twist and turn by setting up a portfolio with Simply Wall St, where we make it simple for investors like you to stay informed and proactive.
Enhance your investing ability with the Simply Wall St app and enjoy free access to essential market intelligence spanning every continent.
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 AIM:CVSG LSE:HMSO and LSE:RNK.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]
