Exploring the three most undervalued small caps with insider information in the region

In a relatively quiet week in global markets, U.S. small-cap stocks and technology sectors put in a notable performance, outperforming their larger counterparts as investors adjusted their positions ahead of quarterly results. This context provides an interesting basis for exploring undervalued small-cap stocks, particularly those where recent insider actions suggest they may be flying under the radar during these turbulent times.

Top 10 undervalued small caps with insider purchases

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Simply Wall St Value Rating: ★★★★☆☆

Overview: Map Aktif Adiperkasa is engaged in retail and non-retail businesses, primarily in Indonesia, and has a market capitalization of approximately IDR 12.80 billion.

Operations: The Company’s total revenue from retail and non-retail sales amounts to IDR 14.60 billion, with gross profit margin increasing significantly from 39.56% at the end of 2015 to 47.36% by mid-2024, reflecting improved cost management over the analyzed periods.

SPORTS: 15.8x

As a sign of strong insider confidence, Miquel Staal recently acquired 3.7 million shares of Map Aktif Adiperkasa for IDR 2.96 billion. This move underscores the belief in the company’s potential despite its reliance on riskier external borrowings. With a significant increase in revenue to IDR 3.69 billion and net profit of IDR 281 million as reported in the latest quarterly results, the company shows promising growth prospects. This financial upturn is in line with an earnings forecast that predicts an annual growth rate of 18.3%, positioning Map Aktif Adiperkasa as an attractive company within its sector for those eyeing underestimated market opportunities.

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Kinetic Development Group is a diversified business company with a market capitalization of approximately CNY 1.23 billion.

Operations: The company’s revenue has increased from CN¥102.90 million in 2013 to CN¥4745.07 million by the end of 2024, while the gross profit margin improved significantly from 9.05% to 59.07% during the same period. This growth curve is characterized by an increasing net profit margin, which turned positive and increased to 43.79% by the last recording date, reflecting improved profitability and operating efficiency.

SPORTS: 4.3x

Reflecting a strategic stance in its sector, Kinetic Development Group recently strengthened its governance framework and dividend policy amid market volatility. On May 7, 2024, it revised its corporate charter to increase operational flexibility and declared a modest final dividend of HK$0.05 per share for the financial year ending December 31, 2023. Insiders’ confidence is evident as they have recently purchased shares, suggesting they believe in the company’s potential despite the external financing risks evident in its financial structure. With these developments and its first-quarter results expected on May 31, Kinetic seems poised for some interesting momentum.

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Hammond Power Solutions specializes in the manufacture and sale of transformers and has a market capitalization of approximately 120 million Canadian dollars.

Operations: The Company’s gross profit margin has shown an increasing trend and was 32.49% for the last period, higher than the previous year. This improvement reflects more efficient management of production costs relative to revenues from the manufacture and sale of transformers, which totaled CAD$729.61 million for the last reporting period.

SPORTS: 23.9x

Hammond Power Solutions, a lesser-known company in the market, recently demonstrated its financial resilience despite a difficult quarter. Revenue increased to CA$190.68 million in the first quarter from CA$171.13 million a year ago and net income was CA$7.95 million (up from CA$15.73 million a year ago). The numbers reflect mixed financial health but an upward trend in revenue. Insiders’ confidence was clearly evident as they recently bought shares, signaling belief in long-term value despite current earnings volatility. The company’s reliance on external borrowing underscores a riskier but necessary growth strategy, which is expected to grow at an annual rate of 18.59%.

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This Simply Wall St article is of a general nature. We comment solely on historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.

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