Over the last 7 days, the United States market has experienced a 1.6% decline, although it has shown a robust 31% increase over the past year, with earnings expected to grow by 15% annually in the coming years. In this context, identifying stocks that are potentially undervalued and exhibit insider buying can be an intriguing strategy for investors looking to capitalize on future growth opportunities.
Top 10 Undervalued Small Caps With Insider Buying In The United States
Overview: PRA Group is a company specializing in the purchase, collection, and management of nonperforming loans with a market capitalization of approximately $1.13 billion.
Operations: PRA Group's revenue primarily stems from its operations in accounts receivable management, with recent revenue figures reaching $977.66 million. The company has consistently reported a gross profit margin of 100%, indicating that it incurs no cost of goods sold. However, operating expenses and non-operating expenses significantly impact net income, which has shown variability over time, with recent periods experiencing negative net income margins as low as -10.40%.
PE: 208.1x
PRA Group stands out in the small-cap category with insider confidence evident from Geir Olsen's recent purchase of 11,750 shares worth US$251,332. The company faces higher risk due to reliance on external borrowing but has extended its credit agreements totaling US$2.3 billion until 2029. Earnings are forecasted to grow significantly by 101.98% annually, and recent results show a turnaround with Q2 revenue at US$284 million and net income of US$21 million compared to losses last year.
Overview: Proto Labs is a company specializing in rapid manufacturing of custom prototypes and low-volume production parts, with operations primarily focused on serving the machinery and industrial equipment sectors, and it has a market cap of approximately $0.89 billion.
Operations: Proto Labs generates revenue primarily from the machinery and industrial equipment sector, with recent figures reaching $504.19 million. The company's cost of goods sold (COGS) has been substantial, impacting its gross profit margin, which was 45.03% as of the latest period. Operating expenses have also been significant, driven by sales and marketing as well as research and development costs.
PE: 39.8x
Proto Labs, a company known for its innovative manufacturing solutions, is currently spotlighted as an undervalued investment opportunity in the United States. Despite experiencing share price volatility over the past three months, insider confidence is evident with Robert Bodor acquiring 3,480 shares valued at approximately US$99,800 in October 2024. The company's recent earnings guidance for Q4 suggests revenue between US$115 million and US$123 million. Although Q3 sales dipped slightly to US$125.34 million from last year's figures, net income improved significantly over nine months to US$17 million compared to the previous year's US$10.23 million.
Overview: PROS Holdings is a company that specializes in providing AI-powered solutions for pricing and revenue management across various industries, with a market capitalization of approximately $1.54 billion.
Operations: PROS Holdings generates revenue primarily from its software and programming segment, with recent figures reaching $322.89 million. The company has experienced a notable trend in its gross profit margin, which increased to 64.48% by the latest reported period. Operating expenses are significant, with sales and marketing as well as research and development being major components of these costs.
PE: -34.5x
PROS Holdings, a smaller company in the U.S. market, shows potential despite current challenges. The recent earnings report highlighted revenue growth to US$82.7 million for Q3 2024, up from US$77.25 million a year ago, with net income turning positive at US$0.235 million compared to a loss last year. However, the company remains unprofitable and relies on external borrowing for funding. Notably, insider confidence is evident with recent purchases by executives within the last few months of 2024, indicating belief in future prospects amidst CEO transition plans and innovative product launches like PROS Smart Rebate Management aimed at enhancing profitability through automated solutions.
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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.
