As global markets react positively to the recent U.S.-China tariff suspension, with major indices like the Nasdaq Composite and S&P 500 showing significant gains, small-cap stocks have also benefited from this improved sentiment. In this environment of easing trade tensions and cooling inflation, identifying promising small-cap stocks involves looking for those with strong fundamentals and potential insider action that may signal confidence in their future growth.
Top 10 Undervalued Small Caps With Insider Buying Globally
Overview: Charter Hall Retail REIT is a real estate investment trust specializing in the ownership and management of convenience retail properties, with a market capitalization of A$2.52 billion.
Operations: Convenience Shopping Centre Retail is the primary revenue stream, contributing A$223.60 million, while Convenience Net Lease Retail adds A$52 million. The company's gross profit margin has shown variability, with a high of 84.07% and a low of 61.49%. Operating expenses have remained relatively modest compared to gross profit levels over the periods analyzed.
PE: 13.7x
Charter Hall Retail REIT, a smaller player in its sector, has recently shown insider confidence through share purchases over the past six months. While their financial position shows debt not well covered by operating cash flow and reliance on higher-risk external borrowing, they maintain high-quality earnings despite large one-off items. However, with earnings forecasted to decline by an average of 0.1% annually over the next three years, potential investors should weigh these factors carefully.
Overview: Argosy Property is a New Zealand-based property investment company focusing on commercial real estate, with a market capitalization of approximately NZ$1.26 billion.
Operations: Argosy Property's revenue is primarily derived from its operations, with a gross profit margin that has shown variability over time, reaching 75.06% by March 2025. The company incurs costs of goods sold and operating expenses, which have impacted its net income margins significantly, as seen in recent periods where non-operating expenses contributed to negative net income margins before recovering to a positive 80.82% by March 2025.
PE: 7.4x
Argosy Property, a smaller player in the property sector, recently showcased a financial turnaround with net income rising to NZ$125.86 million from a loss of NZ$54.49 million last year. Despite earnings being hit by large one-off items and future declines forecasted at 3.7% annually over three years, insider confidence is evident through recent share purchases. The company's reliance on external borrowing poses risks but highlights potential for those seeking value in underappreciated stocks within this segment.
Overview: VersaBank operates as a digital bank in Canada, providing banking services and financial technology development through its Digital Banking Canada and DRTC segments, with a market capitalization of CA$0.29 billion.
Operations: Digital Banking Canada is the primary revenue stream, contributing CA$98.06 million, while DRTC adds CA$9.71 million. The net income margin shows variability, peaking at 40.54% and dropping to 26.45% over the observed periods. Operating expenses are a significant cost component, with General & Administrative Expenses consistently forming a large portion of these costs across various periods analyzed.
PE: 15.1x
VersaBank, a small cap financial institution, is catching attention with its insider confidence. President David Taylor's purchase of 57,948 shares for approximately CAD 701,172 reflects strong belief in the company's potential. Despite a dip in net income to CAD 8.14 million from CAD 12.7 million last year and steady earnings per share of CAD 0.28, the bank is set to repurchase up to 2 million shares by April 2026 under its buyback program. With earnings projected to grow over time, VersaBank presents an intriguing opportunity for investors seeking value in smaller companies with growth prospects.
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:CQR NZSE:ARG and TSX:VBNK.
