Over the last 7 days, the United States market has dropped 3.4%, but it remains up by 20% over the past year, with earnings forecasted to grow by 15% annually. In this context, identifying undervalued small-cap stocks with insider buying can be a strategic approach for investors looking to capitalize on potential growth opportunities amidst current market fluctuations.

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

Click here to see the full list of 58 stocks from our Undervalued US Small Caps With Insider Buying screener.

Below we spotlight a couple of our favorites from our exclusive screener.

ChoiceOne Financial Services

Simply Wall St Value Rating: ★★★★☆☆

Overview: ChoiceOne Financial Services operates as a community bank providing a range of financial services including personal and business banking, with a market cap of approximately $0.12 billion.

Operations: ChoiceOne Financial Services generates revenue primarily from its banking segment, which amounted to $83.14 million in the latest period. The company's operating expenses were $53.18 million, with general and administrative expenses making up a significant portion at $47.58 million. The net income margin for the most recent period was 27.23%.

PE: 12.0x

ChoiceOne Financial Services, a small cap stock in the U.S., has shown insider confidence with recent share purchases. Their earnings for Q2 2024 saw net interest income rise to US$18.37 million from US$16.09 million year-over-year, while net income increased to US$6.59 million from US$5.21 million. Despite shareholder dilution from a recent $30 million equity offering, they continue paying dividends, with the latest set at $0.27 per share for Q3 2024, reflecting steady financial health and potential growth prospects.

• Click here and access our complete valuation analysis report to understand the dynamics of ChoiceOne Financial Services.

• Examine ChoiceOne Financial Services' past performance report to understand how it has performed in the past.

Gladstone Commercial

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Gladstone Commercial is a real estate investment trust (REIT) focused on acquiring, owning, and managing commercial properties with a market cap of approximately $0.76 billion.

Operations: Gladstone Commercial generates revenue primarily from its commercial real estate investments, with a recent quarterly revenue of $145.15 million. The company has shown a gross profit margin of 79.12% in the latest period, reflecting its ability to manage costs effectively relative to its revenue generation.

PE: -457.0x

Gladstone Commercial has recently shown insider confidence with share purchases in the past quarter. They secured an 8-year lease extension with Elster Solutions and acquired a Class A industrial facility in Texas, leased to a top provider of electrical connectors. Despite unprofitability and reliance on external borrowing, the company reported improved earnings for Q2 2024, with net income reaching US$1.61 million compared to a loss last year. These moves align with their strategy of acquiring assets leased to credit-worthy tenants in strong markets.

• Dive into the specifics of Gladstone Commercial here with our thorough valuation report.

• Assess Gladstone Commercial's past performance with our detailed historical performance reports.

Chimera Investment

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Chimera Investment operates by investing, on a leveraged basis, in a diversified portfolio of mortgage assets and has a market cap of approximately $1.55 billion.

Operations: The company generates revenue primarily from investing in a diversified portfolio of mortgage assets, with recent quarterly revenues reaching $306.43 million. Operating expenses have varied but were reported at $53.49 million in the latest quarter, impacting net income, which was $140.77 million for the same period. Gross profit margin has shown fluctuations and was 89.91% most recently.

PE: 8.8x

Chimera Investment has demonstrated solid financial performance with net income for the second quarter of 2024 at US$56.66 million, up from US$36.02 million a year ago. Basic earnings per share rose to US$0.42 from US$0.23 in the same period last year, indicating strong profitability despite its reliance on external borrowing for funding. Recent insider confidence is evident with significant share purchases over the past six months, suggesting optimism about future prospects despite anticipated earnings decline by an average of 5.8% annually over the next three years.

• Navigate through the intricacies of Chimera Investment with our comprehensive valuation report here.

• Gain insights into Chimera Investment's past trends and performance with our Past report.

Make It Happen

• Embark on your investment journey to our 58 Undervalued US Small Caps With Insider Buying selection here.

• Already own these companies? Bring clarity to your investment decisions by linking up your portfolio with Simply Wall St, where you can monitor all the vital signs of your stocks effortlessly.

• Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors.

Interested In Other Possibilities?

• 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:COFS NasdaqGS:GOOD and NYSE:CIM.

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