As global markets grapple with economic uncertainty, inflation fears, and trade policy concerns, small-cap stocks have been particularly affected by the broader market sentiment. Despite these challenges, value stocks have shown resilience and outperformed growth shares for several weeks, highlighting opportunities for investors seeking potential in undervalued small caps. In such a climate, identifying promising stocks often involves looking at those with strong fundamentals and insider buying activity as indicators of confidence in their future performance.
Top 10 Undervalued Small Caps With Insider Buying Globally
Overview: Hansen Technologies is a global provider of software and services to the energy, water, and communications industries with a market capitalization of A$1.04 billion.
Operations: Hansen Technologies generates revenue primarily through its services, with recent figures showing a gross profit margin of 27.73% as of December 31, 2024. The company has seen an increase in cost of goods sold (COGS), which reached A$262.70 million by the end of 2024, impacting its profitability margins over time. Operating expenses have also risen to A$74.96 million during the same period, contributing to a net income margin decline to approximately 0.97%.
PE: 284.6x
Hansen Technologies, a smaller company in the tech space, is catching attention with its recent client and product announcements. The company secured an extended agreement with RiksTV, enhancing their cloud capabilities and promising a rapid ROI of 18 months. Additionally, Hansen's AI Virtual Agent aims to revolutionize customer support for utility firms. Despite reporting lower net income of A$0.07 million for the half-year ending December 2024 compared to A$17.62 million previously, insider confidence remains strong with recent share purchases indicating belief in future growth potential.
Overview: NorthWest Healthcare Properties Real Estate Investment Trust operates as a real estate investment trust focused on owning and managing healthcare properties, with a market capitalization of approximately CA$2.56 billion.
Operations: The company generates revenue primarily from the healthcare real estate industry, with its gross profit margin fluctuating between 69.89% and 94.83% over the observed periods. Operating expenses have varied, impacting net income significantly, with recent figures showing a negative trend in net income margin reaching -75.29%. Non-operating expenses have also been substantial, contributing to these financial outcomes.
PE: -4.1x
NorthWest Healthcare Properties Real Estate Investment Trust, a smaller player in the market, recently showcased insider confidence with Robert Julien acquiring 600,000 shares valued at approximately C$2.72 million. Despite facing a net loss of C$299.76 million for 2024, they reported fourth-quarter sales of C$102.7 million and continue to distribute monthly dividends of C$0.03 per share. Their recent issuance of senior unsecured debentures totaling C$500 million aims to manage existing debt obligations effectively while maintaining a stable credit rating from Morningstar DBRS.
Overview: VersaBank operates as a digital bank in Canada, offering innovative banking solutions and cybersecurity services through its DRTC segment, with a market cap of approximately CA$0.34 billion.
Operations: The company generates revenue primarily from Digital Banking Canada, contributing CA$98.06 million, and DRTC services at CA$9.71 million. Operating expenses are a significant component of the cost structure, with General & Administrative Expenses consistently forming a large part of these costs. The net income margin has shown variability but reached 40.54% in the most recent period ending October 2024, indicating fluctuations in profitability over time.
PE: 14.0x
VersaBank, a smaller player in the financial sector, has demonstrated insider confidence with recent share purchases. Despite a dip in net income to CAD 8.14 million from CAD 12.7 million year-on-year for Q1 2025, the bank maintains steady dividends at CAD 0.025 per share for the upcoming quarter. Earnings are projected to grow annually by over 55%, suggesting potential value amidst current challenges and positioning it as an intriguing option within its category.
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 ASX:HSN TSX:NWH.UN and TSX:VBNK.
