Undervalued Small Caps With Insider Action: Top Picks for January 2025

As we kick off the new year, investors are looking for opportunities in the small-cap space. While the broader market has been volatile, small-cap stocks have shown resilience, with indices like the Russell 2000 posting gains despite economic challenges. In this dynamic environment, identifying undervalued small-cap stocks with insider action can be a strategic approach for investors seeking opportunities in less prominent segments of the market.

Top 10 Undervalued Small Caps With Insider Buying
Name PE PS Discount to Fair Value Value Rating
OptimizeRx NA 1.1x 45.01% ★★★★★☆
Quanex Building Products 31.0x 0.8x 41.59% ★★★★☆☆
Franklin Financial Services 8.8x 1.7x 42.65% ★★★★☆☆
McEwen Mining 4.3x 2.2x 43.85% ★★★★☆☆
RGC Resources 17.1x 2.4x 22.37% ★★★☆☆☆
Community West Bancshares 18.7x 2.9x 42.25% ★★★☆☆☆
ProPetro Holding NA 0.7x 16.76% ★★★☆☆☆
Tilray Brands NA 1.4x -34.70% ★★★☆☆☆
Delek US Holdings NA 0.1x -80.45% ★★★☆☆☆
Sabre NA 0.4x -61.47% ★★★☆☆☆

Click here to see the full list of 41 stocks from our Undervalued US Small Caps With Insider Buying screener.
Underneath we present a selection of stocks filtered out by our screen.

Hudson Technologies (NasdaqCM:HDSN)
Simply Wall St Value Rating: ★★★★☆☆
Overview: Hudson Technologies specializes in providing innovative solutions for the refrigeration industry, with a market capitalization of approximately $0.69 billion.
Operations: The company generates revenue primarily through its wholesale segment, with a recent figure of $247.33 million. The gross profit margin has shown fluctuations over time, reaching 52.15% in September 2022 before declining to 29.88% by September 2024. Operating expenses have consistently impacted profitability, with general and administrative costs being a significant component, recorded at $33.55 million in September 2024.
PE: 8.5x
Hudson Technologies, a small company in the U.S., is facing challenges with declining earnings and lower profit margins. In Q3 2024, sales fell to US$61.94 million from US$76.5 million the previous year, while net income decreased to US$7.81 million from US$13.58 million. Despite this, insider confidence is evident through recent share repurchases totaling 326,028 shares for US$2.63 million between August and September 2024. The company also adjusted its revenue guidance for 2024 downward but expanded its buyback plan by an additional US$10 million, signaling potential long-term value recognition amidst current financial hurdles.

Unlock comprehensive insights into our analysis of Hudson Technologies stock in this valuation report.
Gain insights into Hudson Technologies' past trends and performance with our Past report.
NasdaqCM:HDSN Ownership Breakdown as at Jan 2025

Capitol Federal Financial (NasdaqGS:CFFN)
Simply Wall St Value Rating: ★★★☆☆☆
Overview: Capitol Federal Financial is a banking institution primarily engaged in community banking operations, with a market capitalization of approximately $1.24 billion.
Operations: The company primarily generates revenue through its community banking operations, with recent figures showing a revenue of $166.05 million. Operating expenses are significant, totaling $105.89 million in the latest period, with general and administrative expenses accounting for $87.85 million of this amount. The net income margin has shown fluctuations over time, most recently recorded at 22.87%.
PE: 19.1x
Capitol Federal Financial, a smaller player in the financial sector, has shown resilience with its recent earnings turnaround. For the year ending September 2024, net income reached US$38.01 million compared to a net loss of US$101.66 million previously. This improvement reflects stronger operations and potential growth prospects as earnings are forecasted to grow annually by 26.21%. Despite no insider buying activity reported recently, the company remains committed to shareholder returns with a consistent dividend of US$0.085 per share announced for November 2024 payout.

Navigate through the intricacies of Capitol Federal Financial with our thorough valuation report here.
Understand Capitol Federal Financial's track record by examining our Past report.
NasdaqGS:CFFN Share price vs Value as at Jan 2025

Capital Southwest (NasdaqGS:CSWC)
Simply Wall St Value Rating: ★★★★★☆
Overview: Capital Southwest is a business development company that provides financing solutions to middle-market companies, with a market capitalization of approximately $0.56 billion.
Operations: The company generates revenue primarily from investments, with a recent figure of $195.06 million. Operating expenses are a significant cost component, recently reported at $26.26 million. The net income margin has shown variability, with the latest being 37.77%.
PE: 14.1x
Capital Southwest, a smaller company in the U.S., has been attracting attention for its potential value. Despite challenges with debt coverage by operating cash flow, the firm maintains strong liquidity and seeks acquisitio



In conclusion, identifying undervalued small-cap stocks with insider action in the US for January 2025 requires a strategic approach that combines fundamental analysis, insider buying patterns, and sector-specific trends. By considering these factors, investors can uncover promising opportunities in the small-cap space and make well-informed investment decisions.