The United States market remained flat over the last week but has seen a 7.2% increase over the past year, with earnings projected to grow by 14% annually. In this environment, identifying stocks that are perceived as undervalued and have insider buying activity can be an intriguing opportunity for investors seeking potential growth.
Top 10 Undervalued Small Caps With Insider Buying In The United States
Overview: Diamond Hill Investment Group is a company that provides investment advisory and fund administration services, with a market capitalization of approximately $0.5 billion.
Operations: The company generates revenue primarily from investment advisory and fund administration services, amounting to $151.92 million in the most recent period. The cost of goods sold (COGS) was $78.94 million, leading to a gross profit of $72.98 million with a gross profit margin of 48.04%. Operating expenses totaled $24.33 million, while non-operating expenses were reported at $8.13 million, contributing to a net income margin of 26.68%.
PE: 9.1x
Diamond Hill Investment Group, a smaller company in the investment management sector, exhibits characteristics of being undervalued. Despite a 2.2% annual decline in earnings over the past five years, recent insider confidence is evident through share purchases in November and December 2024. The firm reported Q1 2025 revenue of US$37.12 million but saw net income drop to US$10.36 million from US$13.02 million year-over-year. A consistent quarterly dividend of US$1.50 per share underscores its commitment to shareholder returns amidst challenging earnings performance.
Overview: Enviri operates through three main segments: Clean Earth, Harsco Rail, and Harsco Environmental, with a focus on environmental solutions and services.
Operations: The company generates revenue primarily through its three segments: Clean Earth, Harsco Rail, and Harsco Environmental. The gross profit margin has shown variability over the periods with a recent figure of 20.96% as of September 2024. Operating expenses and non-operating expenses are significant cost components affecting profitability, with general and administrative expenses being a notable part of operating costs.
PE: -4.7x
Enviri, a smaller U.S. company, faces challenges with profitability and relies entirely on external borrowing for funding. Despite reporting a Q1 2025 revenue drop to US$548 million from US$600 million the previous year, their net loss improved to US$13.4 million from US$17.96 million. Recent insider confidence is evident through significant stock purchases related to employee stock ownership plans (ESOP). Leadership changes aim to enhance growth opportunities in its rail division, suggesting strategic positioning for future value creation amidst financial restructuring efforts like amended credit agreements.
Overview: PHINIA operates in the automotive sector, focusing on aftermarket products and fuel systems, with a market cap of $1.47 billion.
Operations: The company generates revenue primarily from its Fuel Systems and Aftermarket segments, totaling $3.59 billion after accounting for eliminations. Gross profit margin has shown an upward trend, reaching 22.27% by March 2025. Operating expenses are a significant cost factor, with General & Administrative expenses being notable at $446 million in the latest period.
PE: 21.7x
PHINIA, a smaller player in the U.S. market, has shown insider confidence with recent share repurchases totaling 2.1 million shares for US$100 million from January to March 2025. Despite facing higher-risk funding due to reliance on external borrowing, PHINIA projects net sales between US$3.23 billion and US$3.43 billion for 2025, hinting at modest growth potential amid a challenging environment. The company’s strategic expansion through Alliant Power in Florida and Puerto Rico aims to boost its distribution network and enhance customer service capabilities in the diesel systems sector.
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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.
