UK's Top Undervalued Small Caps With Insider Action In January 2025

Simply Wall St · 01/20 12:05

Amidst a challenging backdrop for the United Kingdom's market, with the FTSE 100 and FTSE 250 indices reflecting pressures from weak trade data out of China, small-cap stocks are drawing attention as potential pockets of opportunity. In such an environment, discerning investors often seek companies with strong fundamentals and insider activity as indicators of confidence in their resilience and growth potential.

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

Name PE PS Discount to Fair Value Value Rating
NCC Group NA 1.3x 28.04% ★★★★★★
4imprint Group 15.6x 1.3x 39.53% ★★★★★☆
Speedy Hire NA 0.3x 33.44% ★★★★★☆
XPS Pensions Group 11.2x 3.2x 6.54% ★★★★☆☆
Robert Walters 36.3x 0.2x 27.72% ★★★★☆☆
Sabre Insurance Group 11.3x 1.5x 12.78% ★★★★☆☆
iomart Group 24.2x 0.6x 33.77% ★★★★☆☆
Telecom Plus 17.9x 0.7x 30.62% ★★★☆☆☆
Warpaint London 24.2x 4.2x 0.73% ★★★☆☆☆
THG NA 0.3x -514.81% ★★★☆☆☆

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

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

Coats Group (LSE:COA)

Simply Wall St Value Rating: ★★★★★☆

Overview: Coats Group is a global industrial thread manufacturer with operations in apparel, footwear, and performance materials, boasting a market cap of approximately £1.07 billion.

Operations: The company's revenue primarily comes from its Apparel, Footwear, and Performance Materials segments. Over the observed periods, the net income margin shows fluctuations, with a notable increase to 6.90% by mid-2024. The cost of goods sold (COGS) significantly impacts gross profit margins, which reached 36.28% in mid-2024. Operating expenses are consistently driven by sales and marketing as well as general and administrative costs.

PE: 18.5x

Coats, a UK company with small market capitalization, has shown promising sales growth of 11% from July to October 2024, driven by Footwear and Apparel segments. Despite high debt levels and reliance on external borrowing, the company is forecasted to grow earnings by 15.79% annually. Recent insider confidence was demonstrated through share purchases in the past year. An executive transition will occur as Hannah Nichols steps in as CFO post-May 2025 AGM, potentially steering future financial strategies positively for Coats.

LSE:COA Share price vs Value as at Jan 2025
LSE:COA Share price vs Value as at Jan 2025

Workspace Group (LSE:WKP)

Simply Wall St Value Rating: ★★★★★★

Overview: Workspace Group is a company focused on providing business accommodation for rent, with a market capitalization of approximately £1.18 billion.

Operations: The primary revenue stream is derived from providing business accommodation for rent, with the latest reported revenue at £186 million. The gross profit margin has recently been recorded at 67.58%. Operating expenses and non-operating expenses have significantly impacted net income, which was last noted as a loss of £34.4 million.

PE: -26.7x

Workspace Group, a key player in the UK market, has shown signs of being undervalued. They reported a net income of £10.2 million for the half-year ending September 2024, bouncing back from a significant loss last year. This turnaround is complemented by insider confidence through share purchases over recent months. Workspace's commitment to sustainability is evident with Leroy House, their first fully net-zero building, reflecting an innovative approach that appeals to London's SMEs and supports future growth prospects.

LSE:WKP Share price vs Value as at Jan 2025
LSE:WKP Share price vs Value as at Jan 2025

Zigup (LSE:ZIG)

Simply Wall St Value Rating: ★★★★★★

Overview: Zigup operates in the rental and claims services sectors, with a market capitalization of £2.45 billion.

Operations: Zigup generates revenue primarily from UK&I Rental (£575.33 million), Spain Rental (£360.69 million), and Claims & Services (£953.98 million). The company's gross profit margin showed a notable fluctuation, peaking at 29.54% in October 2022 before declining to 21.99% by January 2025, indicating variability in cost management and pricing strategies over time.

PE: 7.4x

Zigup, a UK-based company, has seen its profit margins decline to 5.1% from 7.7% last year, with net income dropping to £43.42 million for the half-year ending October 2024 compared to £74.56 million previously. Despite this, sales increased slightly to £338.21 million from £322.89 million a year ago. The company's financial position is challenged by reliance on external borrowing without customer deposits as funding sources; however, insider confidence remains high with recent share purchases indicating potential optimism about future growth prospects amidst ongoing dividend increases and revenue forecasts of 5% annual growth.

LSE:ZIG Share price vs Value as at Jan 2025
LSE:ZIG Share price vs Value as at Jan 2025

Where To Now?

Want To Explore Some Alternatives?

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.