UK Undervalued Small Caps With Insider Actions To Watch In February 2025

As the UK market grapples with the ripple effects of sluggish trade data from China, both the FTSE 100 and FTSE 250 have experienced declines, reflecting broader concerns about global economic recovery and its impact on commodity-dependent sectors. Amidst this backdrop, investors may find potential opportunities in small-cap stocks that demonstrate resilience through strategic insider actions and sound fundamentals.

Top 10 Undervalued Small Caps With Insider Buying In The United Kingdom
Name PE PS Discount to Fair Value Value Rating
Bytes Technology Group 21.5x 5.5x 26.86% ★★★★★★
Stelrad Group 11.8x 0.6x 22.44% ★★★★★★
Speedy Hire NA 0.3x 25.65% ★★★★★☆
Gamma Communications 22.7x 2.3x 37.87% ★★★★☆☆
iomart Group 23.3x 0.6x 31.47% ★★★★☆☆
CVS Group 26.8x 1.1x 45.74% ★★★★☆☆
Franchise Brands 37.5x 1.9x 31.69% ★★★★☆☆
Telecom Plus 17.6x 0.7x 31.89% ★★★☆☆☆
Warpaint London 24.0x 4.2x 2.41% ★★★☆☆☆
Eagle Eye Solutions Group 18.7x 2.3x 21.76% ★★★☆☆☆

Click here to see the full list of 40 stocks from our Undervalued UK Small Caps With Insider Buying screener.

Let's dive into some prime choices from the screener.

Franchise Brands (AIM:FRAN)
Simply Wall St Value Rating: ★★★★☆☆
Overview: Franchise Brands is a multi-brand franchisor that operates across various sectors, including Azura, Pirtek, B2C Division, Filta International, and Water & Waste Services, with a market capitalization of approximately £0.31 billion.
Operations: Franchise Brands generates revenue primarily from Pirtek (£60.78M), Water & Waste Services (£49.17M), and Filta International (£25.64M). The company's gross profit margin has shown variability, reaching 66.47% in September 2023 and standing at 61.66% by June 2024, indicating changes in cost efficiency or pricing strategies over time.
PE: 37.5x
Franchise Brands, a UK-based company with a small market presence, is drawing attention for its growth potential despite relying entirely on external borrowing. Revenue is projected to increase by 7.89% annually, highlighting its growth trajectory. Recent board changes include the addition of Louise George as an independent Non-Executive Director and Chair of the Audit Committee, bringing extensive franchising and financial expertise. This strategic move could enhance governance and support future expansion efforts within the franchise sector.
Dive into the specifics of Franchise Brands here with our thorough valuation report.
Review our historical performance report to gain insights into Franchise Brands''s past performance.
AIM:FRAN Share price vs Value as at Feb 2025

Mears Group (LSE:MER)
Simply Wall St Value Rating: ★★★★☆☆
Overview: Mears Group is a UK-based company specializing in providing management and maintenance services, with a market capitalization of approximately £0.34 billion.
Operations: The company generates revenue primarily from management (£591.63 million) and maintenance (£551.73 million) activities. Over the recent periods, its gross profit margin has shown an upward trend, reaching 21.68% by mid-2024. Operating expenses are a significant portion of costs, with general and administrative expenses consistently being a major component within this category.
PE: 7.7x
Mears Group, recognized for its small company stature, recently saw insider confidence with Andrew C. Smith acquiring 25,000 shares valued at £91,100. This purchase highlights potential belief in the company's future despite an anticipated earnings decline of 13.8% annually over the next three years. Financially reliant on external borrowing without customer deposits, Mears faces higher funding risks. Recent leadership changes include Angela Lockwood stepping in as Senior Independent Director following Dame Julia Unwin's retirement on January 2, 2025.
Click here to discover the nuances of Mears Group with our detailed analytical valuation report.
Evaluate Mears Group's historical performance by accessing our past performance report.
LSE:MER Ownership Breakdown as at Feb 2025

Pets at Home Group (LSE:PETS)
Simply Wall St Value Rating: ★★★★★★
Overview: Pets at Home Group operates as a leading UK pet care business, providing a range of products and services through its retail and veterinary segments, with a market cap of £1.34 billion.
Operations: PETS generates revenue primarily from its Retail and Vet Group segments, with the Retail segment contributing significantly more. The company has experienced fluctuations in net income margin, which was 6.13% as of February 2025. Operating expenses, particularly sales and marketing costs, are a major component of its cost structure.
PE: 11.2x
Pets at Home Group, a UK-based company, showcases potential for growth with earnings projected to rise by 11.06% annually. Despite relying solely on external borrowing for funding, which carries higher risk, the company reported strong financial performance in H1 2025 with sales reaching £789.1 million and net income of £37.6 million. Insider confidence is evident as insiders have increa



In conclusion, the UK market's undervalued small caps with insider actions present attractive opportunities for investors seeking growth and value. By focusing on companies with strong fundamentals, strategic insider actions, and sound governance, investors can identify potential winners in the current market environment. Keep an eye on Franchise Brands, Mears Group, and Pets at Home Group, as well as other undervalued small caps with insider buying, to capitalize on the market's potential for appreciation.