In recent weeks, global markets have been closely watching developments in trade negotiations and monetary policy, with small- and mid-cap indexes showing resilience by posting gains for the fifth consecutive week. Amid this backdrop of mixed major index performances and cautious central bank actions, investors are keenly interested in small-cap stocks that may offer potential value opportunities. A good stock in this environment is often characterized by solid fundamentals and the ability to navigate economic uncertainties effectively. As we explore three small-cap companies highlighted by insider activity, it's crucial to consider how these factors align with current market conditions.
Top 10 Undervalued Small Caps With Insider Buying Globally
Overview: Charter Hall Long WALE REIT is a real estate investment trust focused on commercial properties, with a market capitalization of A$3.98 billion.
Operations: The company generates revenue primarily from its commercial REIT segment, with the latest reported revenue at A$243.09 million. Cost of goods sold is A$34.1 million, leading to a gross profit of A$208.99 million and a gross profit margin of 85.97%. Operating expenses stand at A$34.67 million, while non-operating expenses are notably high at A$375.55 million, impacting net income significantly to -A$201.22 million with a net income margin of -82.78%.
PE: -14.1x
Charter Hall Long WALE REIT, a smaller player in the market, has drawn attention for its potential value. While earnings don't fully cover interest payments, their forecasted growth at 40.68% annually suggests promising prospects. The company relies solely on external borrowing for funding, which carries higher risk compared to customer deposits. Insider confidence is evident with recent share purchases between January and March 2025. A dividend of A$0.06 per share was affirmed for May 15, 2025, reflecting stable shareholder returns amidst these dynamics.
Overview: Obsidian Energy is a Canadian oil and gas production company focused on developing petroleum and natural gas resources, with a market capitalization of approximately CA$0.76 billion.
Operations: Obsidian Energy's revenue model primarily involves generating income from its core operations, with a notable focus on managing cost of goods sold (COGS) to sustain gross profit margins. The company's gross profit margin has shown fluctuations over the periods, reaching as high as 71.83% in certain quarters. Operating expenses and non-operating expenses have varied significantly, impacting net income outcomes across different reporting periods.
PE: -2.4x
Obsidian Energy, a smaller company in the energy sector, demonstrates potential for value with its recent financial performance. Revenue increased to CAD 176.7 million in Q1 2025 from CAD 164.6 million a year earlier, alongside net income rising to CAD 15.4 million from CAD 11.9 million. Despite facing a property impairment charge of $12.1 million, production levels have grown significantly year-over-year across most categories except light oil. The company is actively managing debt and has extended credit facility terms until May 2027 while maintaining insider confidence through share repurchase programs valid until March 2026, indicating belief in future growth prospects despite reliance on external borrowing for funding needs and some operational challenges like fluctuating production guidance for the first half of the year between 33,600 boe/d and 34,000 boe/d.
Overview: Surge Energy is a Canadian oil-focused exploration and production company with a market cap of CA$0.68 billion, primarily engaged in the acquisition, development, and production of crude oil and natural gas in Western Canada.
Operations: Surge Energy's revenue is primarily derived from its operations, with recent figures showing CA$562.1 million in revenue for the quarter ending March 31, 2025. The company's gross profit margin has experienced fluctuations, reaching 66.75% in the same period. Operating expenses and cost of goods sold significantly impact profitability, with notable variations over time influencing net income outcomes.
PE: -11.8x
Surge Energy, a smaller player in the energy sector, has shown potential with a notable turnaround in its financials. For Q1 2025, they reported CAD 132.33 million in revenue and CAD 8.25 million net income, reversing from a loss the previous year. Production guidance for 2025 is set at an average of 22,500 boepd. Despite relying on external borrowing for funding, insider confidence is evident through share purchases last year and consistent dividend payments of CAD 0.043333 per share affirm their commitment to shareholder returns.
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:CLW TSX:OBE and TSX:SGY.
