As the broader U.S. market shows signs of recovery, with the Nasdaq 100 and S&P 500 both climbing over 1% recently, investors are keenly watching upcoming economic data releases that could influence market dynamics. In this context, identifying undervalued small-cap stocks like Univest Financial becomes particularly compelling, as these may offer growth potential amidst fluctuating market conditions.
Top 10 Undervalued Small Caps With Insider Buying In The United States
Overview: Univest Financial is a diversified financial services company that offers banking, insurance, and wealth management services with a market capitalization of approximately $0.75 billion.
Operations: The company generates revenue primarily through banking, insurance, and wealth management segments, with banking being the most significant contributor at $245.49 million. Over recent periods, it has maintained a consistent gross profit margin of 100%, indicating that direct costs related to its services are minimal or non-existent.
PE: 11.6x
Univest Financial, reflecting the traits of an undervalued entity within the niche market of smaller companies, recently disclosed a strategic share repurchase, buying back 315,507 shares for US$6.45 million in the first quarter of 2024. This move is part of a larger buyback program initiated in 2013, underscoring management's confidence in the company's intrinsic value despite a slight dip in net interest income and earnings per share as reported in their latest quarterly results. Adding to this sentiment, insider confidence is evident as they have recently purchased shares, signaling optimism about future prospects despite forecasts suggesting a potential earnings decline over the next three years.
Overview: Byline Bancorp is a bank holding company primarily engaged in offering banking products and services, with a market capitalization of approximately $1.23 billion.
Operations: The company generates revenue through its banking operations, achieving a net income margin of 31.20% and gross profit margin consistently at 100%. General and administrative expenses reached $184.24 million in the most recent period, indicating significant operational costs relative to its total revenue of $366.62 million.
PE: 11.1x
Recently, Byline Bancorp has shown promising financial growth, with a notable increase in net interest income from US$75.72 million to US$85.54 million and a rise in net income from US$23.95 million to US$30.44 million as of the first quarter ending March 31, 2024. Despite forecasts suggesting a slight decline in earnings over the next three years, the company's management is taking strategic steps such as securing a renewed credit facility of up to US$15 million until May 2025, indicating proactive financial planning and potential for sustained operational funding. This backdrop of financial prudence coupled with insider confidence—demonstrated through recent share purchases—signals a robust foundation for future growth within this underappreciated entity.
Overview: Provident Financial Services is a financial institution that offers traditional banking and other financial services, with a market capitalization of approximately $1.21 billion.
Operations: Traditional Banking and Other Financial Services consistently generate a gross profit margin of 100%, with a notable increase in net income margin from 27.56% in late 2013 to approximately 35.34% by early 2023, reflecting an upward trend in profitability over the decade. Operating expenses have steadily risen, reaching $256.70 million by mid-2024, impacting overall financial performance despite revenue growth to $441.20 million.
PE: 11.5x
Provident Financial Services has recently demonstrated a strategic growth trajectory, underscored by a substantial $225 million fixed-income offering, aimed at bolstering its financial base. With earnings projected to grow by 54.74% annually, investor confidence is further buoyed by insider purchases signaling strong belief in the company's prospects. This move aligns with recent board enhancements and executive shifts designed to strengthen governance and operational oversight, positioning Provident as an appealing pick among undervalued entities in its 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.
