In the last week, the United States market has stayed flat, yet over the past 12 months it has risen by an impressive 33%, with earnings forecasted to grow by 15% annually. In this environment, identifying stocks that may be undervalued can present opportunities for investors seeking potential growth, especially when there is notable insider activity suggesting confidence in a company's prospects.

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

Click here to see the full list of 39 stocks from our Undervalued US Small Caps With Insider Buying screener.

Let's take a closer look at a couple of our picks from the screened companies.

Hudson Technologies

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Hudson Technologies is a company focused on the wholesale distribution of miscellaneous products, with a market capitalization of $0.66 billion.

Operations: Hudson Technologies generates revenue primarily from wholesale activities, with a recent period showing $247.33 million in revenue. The company's cost of goods sold (COGS) was $173.43 million, resulting in a gross profit of $73.90 million and a gross profit margin of 29.88%. Operating expenses totaled $36.62 million, contributing to a net income of $30.90 million and a net income margin of 12.49%.

PE: 9.2x

Hudson Technologies, a small company in the United States, faces challenges with declining earnings and reduced profit margins. Recent financial results show a drop in third-quarter sales to US$61.94 million from US$76.5 million last year, while net income decreased to US$7.81 million from US$13.58 million. The company's funding relies entirely on external borrowing, considered riskier than customer deposits. Despite this, insider confidence is evident with recent share purchases by company insiders between October and November 2024, indicating potential internal optimism about future prospects amidst lowered revenue guidance for 2024 and an expanded buyback plan of up to US$20 million authorized recently.

• Unlock comprehensive insights into our analysis of Hudson Technologies stock in this valuation report.

• Assess Hudson Technologies' past performance with our detailed historical performance reports.

Capital Southwest

Simply Wall St Value Rating: ★★★★★☆

Overview: Capital Southwest is a business development company that primarily focuses on providing flexible financing solutions to support the growth and success of middle-market businesses, with a market cap of approximately $0.61 billion.

Operations: The company generates revenue primarily from its investment activities, with recent figures showing $195.06 million in this segment. Operating expenses have been consistently present, with the latest reported at $26.26 million. The net income margin has shown variability, recently recorded at 37.77%.

PE: 15.0x

Capital Southwest, a smaller U.S. company, has been actively seeking acquisitions to leverage its strong balance sheet liquidity. Recent earnings showed revenue of US$48.71 million for Q2 2024, up from US$42.78 million the previous year, though net income remained nearly flat at US$22.68 million. Despite no share buybacks recently, insider confidence is evident through their strategic growth plans and a supplemental dividend announcement of $0.05 per share for December 2024 suggests a focus on shareholder returns amidst ongoing growth efforts.

• Click to explore a detailed breakdown of our findings in Capital Southwest's valuation report.

• Gain insights into Capital Southwest's historical performance by reviewing our past performance report.

Proficient Auto Logistics

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Proficient Auto Logistics is a company specializing in the transportation and logistics of vehicles, with a market cap of $1.75 billion.

Operations: Proficient Auto Logistics generates revenue primarily from its operations, with a reported revenue of $147.41 million as of September 2024. The company's cost structure includes significant costs of goods sold at $117.69 million and operating expenses totaling $35.60 million, which include general and administrative expenses amounting to $22.32 million. The gross profit margin stood at 20.16%, while the net income margin was -3.99%, indicating challenges in achieving profitability during this period.

PE: -43.2x

Proficient Auto Logistics, operating in a volatile market, reported Q3 2024 sales of US$85.11 million and revenue of US$91.51 million, with a net loss of US$1.37 million. Despite these figures, insider confidence is evident as Director James Gattoni purchased 20,000 shares worth approximately US$379,600 in October 2024. New leadership with Brenda Frank joining the board might signal strategic shifts to address funding risks primarily reliant on external borrowing and drive projected earnings growth of over 94% annually.

• Dive into the specifics of Proficient Auto Logistics here with our thorough valuation report.

• Gain insights into Proficient Auto Logistics' past trends and performance with our Past report.

Key Takeaways

• Access the full spectrum of 39 Undervalued US Small Caps With Insider Buying by clicking on this link.
• Are these companies part of your investment strategy? Use Simply Wall St to consolidate your holdings into a portfolio and gain insights with our comprehensive analysis tools.
• Enhance your investing ability with the Simply Wall St app and enjoy free access to essential market intelligence spanning every continent.

Curious About Other Options?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
• 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 NasdaqCM:HDSN NasdaqGS:CSWC and NasdaqGS:PAL.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com