Over the last 7 days, the market has dropped 1.9%, driven by a pullback of 5.3% in the Information Technology sector. Despite this recent dip, the market is up 21% over the past year and earnings are expected to grow by 15% per annum over the next few years. In this environment, identifying undervalued small-cap stocks with insider action can offer unique opportunities for investors looking to capitalize on potential growth at attractive valuations.

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

Click here to see the full list of 57 stocks from our Undervalued US Small Caps With Insider Buying screener.

We'll examine a selection from our screener results.

Capital Southwest

Simply Wall St Value Rating: ★★★★☆☆

Overview: Capital Southwest is a business development company that provides capital to middle-market companies through debt and equity investments, with a market cap of approximately $0.55 billion.

Operations: Capital Southwest generates revenue from its investment activities, with the most recent quarterly revenue reported at $189.13 million. The company incurs operating expenses, which were $26.04 million in the latest period, and non-operating expenses of $89.47 million, resulting in a net income margin of 38.92%.

PE: 15.9x

Capital Southwest, a small-cap stock, recently presented at the Midwest IDEAS Investor Conference. Despite a 27% year-over-year revenue increase to US$51.35 million for Q1 2024, net income dropped to US$14.04 million from US$23.81 million due to large one-off items impacting earnings quality. The company declared a regular dividend of US$0.58 per share and a supplemental dividend of US$0.06 per share for Q3 2024, reflecting insider confidence in future performance despite higher-risk external borrowing as its sole funding source and past shareholder dilution.

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

• Learn about Capital Southwest's historical performance.

MaxLinear

Simply Wall St Value Rating: ★★★★☆☆

Overview: MaxLinear is a company that designs and sells semiconductors, with a market cap of approximately $2.17 billion.

Operations: MaxLinear generates revenue primarily from its semiconductor segment, with a gross profit margin of 53.99% as of the latest period. The company has significant operating expenses, including R&D and general & administrative costs, which impact its net income.

PE: -6.0x

MaxLinear, a small cap stock in the U.S., has shown insider confidence with CEO Kishore Seendripu purchasing 108,303 shares valued at US$1.4 million recently. Despite reporting a net loss of US$39.27 million for Q2 2024 and a significant drop in sales compared to last year, the company continues to innovate with its Panther III storage accelerator. This product promises substantial cost savings and performance improvements for data storage systems, positioning MaxLinear well amidst growing demand driven by AI advancements.

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

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

Delek US Holdings

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Delek US Holdings is an energy company involved in refining, logistics, and retail operations with a market cap of approximately $1.75 billion.

Operations: The company generates revenue primarily from its refining, retail, and logistics segments. For the period ending 2023-12-31, it reported a gross profit of $1.04 billion with a gross profit margin of 6.12%.

PE: -12.7x

Delek US Holdings, a small-cap stock, recently reported a net loss of US$37.2 million for Q2 2024, compared to a loss of US$8.3 million in the same period last year. Despite this downturn, insider confidence is evident as key executives have been purchasing shares over the past few months. Additionally, Delek increased its quarterly dividend to US$0.255 per share and has been added to multiple Russell indices since July 2024, reflecting its potential for future growth within the sector.

• Click here to discover the nuances of Delek US Holdings with our detailed analytical valuation report.

• Assess Delek US Holdings' past performance with our detailed historical performance reports.

Where To Now?

• Unlock more gems! Our Undervalued US Small Caps With Insider Buying screener has unearthed 54 more companies for you to explore.Click here to unveil our expertly curated list of 57 Undervalued US Small Caps With Insider Buying.

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Ready For A Different Approach?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.

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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:CSWC NasdaqGS:MXL and NYSE:DK.

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