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Bytes Technology Group Leads Trio Of Undervalued Small Caps With Insider Buying Insight

Amidst a backdrop of rebounding indices and easing political concerns in Europe, the United Kingdom's market landscape appears cautiously optimistic as it breaks a three-day losing streak. In such an environment, identifying undervalued small-cap stocks with potential for growth becomes particularly compelling.

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

Name

PE

PS

Discount to Fair Value

Value Rating

Speedy Hire

NA

0.3x

35.75%

★★★★★☆

THG

NA

0.4x

34.29%

★★★★★☆

Bytes Technology Group

28.7x

6.5x

12.22%

★★★★☆☆

Ultimate Products

9.4x

0.7x

19.32%

★★★★☆☆

Bodycote

15.8x

1.7x

18.05%

★★★★☆☆

Eurocell

14.6x

0.4x

24.23%

★★★★☆☆

H&T Group

7.7x

0.7x

-8.97%

★★★☆☆☆

Robert Walters

20.7x

0.3x

35.40%

★★★☆☆☆

Savills

37.8x

0.7x

23.04%

★★★☆☆☆

Hochschild Mining

NA

1.7x

37.70%

★★★☆☆☆

Click here to see the full list of 32 stocks from our Undervalued Small Caps With Insider Buying screener.

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Here we highlight a subset of our preferred stocks from the screener.

Bytes Technology Group

Simply Wall St Value Rating: ★★★★☆☆

Overview: Bytes Technology Group is a company that specializes in providing IT solutions.

Operations: IT Solutions Provider has seen a substantial increase in gross profit margin, rising from 13.53% in early 2018 to 70.42% by mid-2024, reflecting significant operational efficiency improvements over the period. The company's net income also grew impressively, from £8.09 million to £46.85 million over the same timeframe, indicating robust profitability growth alongside revenue expansion from £321.89 million to £207.02 million.

PE: 28.7x

Bytes Technology Group, a lesser-known entity in the UK market, recently showcased strong financial growth with a year-on-year sales increase to £207 million and net income rising to £46.85 million. This performance was complemented by an earnings boost per share, reflecting operational efficiency and market resilience. Notably, insider confidence is evident as executives have not engaged in recent share purchases. The firm also announced a significant dividend hike of 16%, aligning with its robust profit growth—a move that may appeal to value-focused investors looking for potential amidst smaller companies with solid fundamentals and strategic leadership enhancements, including the appointment of experienced executives poised to steer future expansions.

LSE:BYIT Share price vs Value as at Jun 2024
LSE:BYIT Share price vs Value as at Jun 2024

Savills

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Savills is a global real estate services provider involved in consultancy, transaction advisory, investment management, and property and facilities management.

Operations: The company's net income margin has fluctuated over the years, peaking at 0.068% in late 2021 and then declining to 0.018% by the end of 2023, reflecting varying profitability against a backdrop of consistently high gross profit margins maintained at 100%. General and administrative expenses have steadily increased, reaching £1.47 billion by late 2023, indicating rising operational costs impacting overall financial performance.

PE: 37.8x

Savills, a notable player in the UK's commercial real estate sector, recently declared a dividend increase to 13.9p per share and is advising The Gym Group on its UK expansion. With recent leadership appointments in strategic regions like Florida and Canada, the firm is poised for growth. Insider confidence is evident as insiders have recently purchased shares, signaling trust in the company's direction despite a dip in profit margins from last year to 1.8%. These moves underscore Savills' potential as an undervalued entity with promising prospects.

LSE:SVS Share price vs Value as at Jun 2024
LSE:SVS Share price vs Value as at Jun 2024

Target Healthcare REIT

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Target Healthcare REIT is a real estate investment trust specializing in UK care homes, with a market capitalization of approximately £450 million.

Operations: The company generates revenue primarily through property investment, with a notable gross profit margin of 89.22% as of the latest reporting period. Over recent years, it has experienced fluctuations in net income margins, peaking at 86.12% in the same period.

PE: 8.7x

Recently, Target Healthcare REIT has demonstrated financial resilience by declaring a steady interim dividend of 1.428 pence per share, reflecting confidence in their ongoing operations despite relying solely on external borrowing—a higher risk funding strategy. This move, coupled with insider confidence shown through recent share purchases, suggests a robust belief in the company's future prospects. These elements position Target Healthcare as an intriguing consideration for those looking into underappreciated opportunities within the UK market.

LSE:THRL Ownership Breakdown as at Jun 2024
LSE:THRL Ownership Breakdown as at Jun 2024

Key Takeaways

  • Click here to access our complete index of 32 Undervalued Small Caps With Insider Buying.

  • Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments.

  • Take control of your financial future using Simply Wall St, offering free, in-depth knowledge of international markets to every investor.

Ready For A Different Approach?

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 LSE:BYIT LSE:SVS and LSE:THRL.

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