Over the last 7 days, the United States market has remained flat, yet it has experienced a notable 23% rise over the past year with earnings forecasted to grow by 15% annually. In this dynamic environment, identifying stocks that are potentially undervalued and exhibit insider buying can be an intriguing strategy for investors seeking opportunities in small-cap companies.

Top 10 Undervalued Small Caps With Insider Buying In The United States

Click here to see the full list of 45 stocks from our Undervalued US Small Caps With Insider Buying screener.

We're going to check out a few of the best picks from our screener tool.

Arrow Financial

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Arrow Financial is a financial services company primarily engaged in community banking, with a market capitalization of approximately $0.47 billion.

Operations: Arrow Financial generates revenue primarily through community banking services, with recent figures reaching $134.63 million. The company consistently achieves a gross profit margin of 100%, indicating no direct costs associated with its revenue streams. Operating expenses are significant, with general and administrative expenses being the largest component at $79.24 million in the latest period. Net income margins have shown variability, most recently recorded at 22.07%.

PE: 15.2x

Arrow Financial, a small company in the United States, has shown potential for growth with earnings forecasted to increase by 22.67% annually. Despite a dip in fourth-quarter net income to US$4.47 million from US$7.72 million the previous year, insider confidence remains high as insiders have been purchasing shares recently. The company declared a quarterly dividend of US$0.28 per share and appointed four new board members with diverse expertise to guide future strategies and operations improvements.

• Take a closer look at Arrow Financial's potential here in our valuation report.

• Explore historical data to track Arrow Financial's performance over time in our Past section.

Flushing Financial

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Flushing Financial operates as a community bank offering a range of financial services, with a market capitalization of $0.56 billion.

Operations: Flushing Financial's revenue primarily comes from its operations, with a gross profit margin consistently at 100%. The company has experienced fluctuations in net income margin, ranging from a high of 37.56% to a recent low of -27.21%, indicating variability in profitability over time. Operating expenses have been significant, with general and administrative expenses being the largest component.

PE: -15.1x

Flushing Financial, a smaller player in the financial sector, recently faced challenges with net charge-offs rising to US$4.7 million for Q4 2024 from US$60,000 a year prior and reporting a net loss of US$49.25 million compared to an income of US$8.1 million the previous year. Despite these hurdles, insider confidence is evident as they increased their holdings over time. The company completed a follow-on equity offering worth $70 million in December 2024 while maintaining its quarterly dividend at $0.22 per share, signaling resilience amidst market pressures and potential for future earnings growth projected at nearly 100% annually.

• Delve into the full analysis valuation report here for a deeper understanding of Flushing Financial.

• Learn about Flushing Financial's historical performance.

Third Coast Bancshares

Simply Wall St Value Rating: ★★★★★☆

Overview: Third Coast Bancshares operates as a community banking institution with a focus on providing financial services, and it has a market capitalization of approximately $0.32 billion.

Operations: The company generates revenue primarily from community banking, with a revenue of $165.68 million as of the latest period. Operating expenses are significant, totaling $103.42 million, with general and administrative expenses being the largest component at $89.30 million. The net income margin has shown variability over time, reaching 25.91% in the most recent period analyzed.

PE: 11.9x

Third Coast Bancshares, a small company in the financial sector, recently showcased strong performance with fourth-quarter net interest income rising to US$43.44 million from US$37.33 million last year and net income increasing to US$13.73 million from US$9.69 million. Insider confidence is evident as insiders purchased shares over the past months, signaling potential value recognition within the company. Despite recording lower net charge-offs of $879,000 compared to $1.5 million last year, growth prospects remain optimistic with earnings expected to grow 14% annually.

• Navigate through the intricacies of Third Coast Bancshares with our comprehensive valuation report here.

• Assess Third Coast Bancshares' past performance with our detailed historical performance reports.

Summing It All Up

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Seeking Other Investments?

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• Find companies with promising cash flow potential yet trading below their fair value.

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 NasdaqGS:AROW NasdaqGS:FFIC and NasdaqGS:TCBX.

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