European Undervalued Small Caps With Insider Action In May 2025
As European markets react positively to the easing of U.S.-China trade tensions, with key indices like the STOXX Europe 600 Index rising by 2.10%, there is renewed investor interest in small-cap stocks that may have been overlooked amidst broader economic shifts. In this environment, identifying small-cap companies with strong fundamentals and insider activity could present unique opportunities for investors seeking value in a market where sentiment has improved but remains cautious.
Name
PE
PS
Discount to Fair Value
Value Rating
Tristel
29.8x
4.2x
20.11%
★★★★★☆
AKVA group
15.2x
0.7x
48.03%
★★★★★☆
Savills
24.5x
0.5x
41.46%
★★★★☆☆
Cloetta
15.3x
1.1x
46.94%
★★★★☆☆
SmartCraft
41.7x
7.4x
34.47%
★★★★☆☆
Close Brothers Group
NA
0.6x
44.59%
★★★★☆☆
Absolent Air Care Group
22.7x
1.8x
48.49%
★★★☆☆☆
Italmobiliare
11.7x
1.5x
-207.90%
★★★☆☆☆
Eastnine
18.1x
8.7x
39.75%
★★★☆☆☆
Seeing Machines
NA
2.4x
44.74%
★★★☆☆☆
Click here to see the full list of 71 stocks from our Undervalued European Small Caps With Insider Buying screener.
Let's take a closer look at a couple of our picks from the screened companies.
Simply Wall St Value Rating: ★★★★★☆
Overview: Kitwave Group is a UK-based wholesale distributor operating in the ambient, foodservice, and frozen & chilled sectors with a market cap of £0.22 billion.
Operations: Kitwave Group generates revenue primarily through its Ambient, Foodservice, and Frozen & Chilled segments. The company's gross profit margin has seen a notable increase from 14.89% in 2016 to 22.27% by October 2024. Operating expenses, including general and administrative costs, have consistently risen alongside revenue growth over the years.
PE: 15.9x
Kitwave Group's recent performance highlights its potential as an undervalued investment opportunity. Despite a decline in net income to £16.72 million from £18.96 million, sales increased to £663.65 million, indicating resilience amidst challenges. The company plans a total dividend of 11.30 pence per share for the year ending October 2024, reinforcing shareholder value focus. Insider confidence is evident with Olga Young purchasing 77,519 shares for approximately £200,000 in March 2025, signaling potential growth prospects despite high debt levels and reliance on external funding sources.
Take a closer look at Kitwave Group's potential here in our valuation report.
Review our historical performance report to gain insights into Kitwave Group's's past performance.
Simply Wall St Value Rating: ★★★☆☆☆
Overview: Literacy Capital is a closed-end investment company focusing on investing in small, growing UK businesses, with a market capitalization of £0.58 billion.
Operations: The company's revenue primarily comes from financial services, specifically closed-end funds. Over recent periods, the gross profit margin has shown a decline to 69.70%, indicating increased costs or changes in pricing strategy. Operating expenses and non-operating expenses have also impacted net income margins, which have turned negative at -106.88%.
PE: -60.2x
Literacy Capital, a European small-cap company, has seen insider confidence with Christopher Sellers purchasing 50,000 shares for £191K in March 2025. Despite recent financial challenges, including a net loss of £4.24 million for the year ending December 2024 and declining earnings over five years, this insider activity suggests potential optimism about future prospects. The company's reliance on external borrowing highlights its risk profile, yet such investments may indicate perceived opportunities within its current valuation landscape.
Delve into the full analysis valuation report here for a deeper understanding of Literacy Capital.
Understand Literacy Capital's track record by examining our Past report.
Simply Wall St Value Rating: ★★★☆☆☆
Overview: Coats Group is a global leader in industrial thread manufacturing, serving key sectors such as apparel, footwear, and performance materials, with a market capitalization of £1.5 billion.
Operations: The company generates revenue primarily from three segments: Apparel ($769.80 million), Footwear ($403.50 million), and Performance Materials ($327.60 million). The gross profit margin showed a general upward trend, reaching 36.48% by the end of 2024, indicating an improvement in cost management relative to revenue over time. Operating expenses are mainly driven by Sales & Marketing and General & Administrative costs, with non-operating expenses also contributing significantly to the overall expense structure.
PE: 20.8x
Coats Group, a European small cap, is navigating strategic shifts with confidence. Recently, they decided to exit the US Yarns business within their Performance Materials division, aiming for improved EBIT margins and allowing management to focus on more promising segments. Financially, Coats reported 2024 sales of US$1.5 billion and net income of US$80.1 million, showing growth from the previous year. Insider confidence is evident as insiders have been purchasing shares since March 2025, suggesting belief in future prospects despite current challenges like debt not being fully covered by operating cash flow.
Dive into the specifics of Coats Group here with our thorough valuation report.
Explore historical data to track Coats Group's performance over time in our Past section.
Gain an insight into the universe of 71 Undervalued European Small Caps With Insider Buying by clicking 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.
Join a community of smart investors by using Simply Wall St. It's free and delivers expert-level analysis on worldwide markets.
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 AIM:KITW LSE:BOOK and LSE:COA.
Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@simplywallst.com
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
29 minutes ago
- Yahoo
The Iranian threat to oil supplies is overblown
Oil and gas still matter. For all the talk of net zero and the growing share of renewables in electricity generation, hydrocarbons remain crucial to the global economy. Back in 2005, oil accounted for 37pc of the world's primary energy consumption, with gas generating 23pc. The same numbers are now 31pc and 24pc respectively – still hugely significant, with the world's reliance on natural gas as an energy source actually up over the last 20 years. Oil remains vital across numerous sectors, not least transportation – think trucks, aviation and shipping – and the manufacturing of industrial chemicals, plastics and asphalt among vital materials. Gas still generates around a quarter of the world's electricity and is used to make fertiliser – sorely needed to grow enough to feed a fast-expanding global population. We're often told – usually with an eye on geopolitical realities, because hydrocarbons are predominantly found in 'awkward countries' – that the world is less dependent on oil than at the time of, say, the 1973 oil price shock. Back then, the crude price spiked four-fold in under a year after the Arab world embargoed energy exports from the Gulf during the Israel-Egypt Yom Kippur war. The world used 55m barrels a day in the early 1970s but over 100m now, with demand set to rise significantly into the 2030s and beyond. Oil – and gas – remain absolute necessities to any form of modern life, across a fast-industrialising world. Yes, the UK used 2.2m barrels daily half a century ago, and that's fallen to 1.4m now – in part due to efficiencies and renewable energy, but mainly because our manufacturing sector has shrunk from over a fifth to less than a tenth of our economy. Moreover, North Sea operations are now much diminished, not least because of punitive taxation and endless net zero regulation – so Britain is a net oil and gas importer. With both these vital hydrocarbons trading on global markets, we're particularly vulnerable to price spikes, losing out twice – paying more for our supplies without gaining the profits and extra taxation reaped by energy exporters when prices are high. I mention all this, of course, because the escalation of military hostilities between Israel and Iran, while causing yet more death, displacement and destruction across the Middle East, poses economic dangers too. Amidst the terrible human fallout, a spiking oil price threatens to reverse a fragile global recovery. From mid-January to early May, Brent crude fell from $81 (£60) a barrel to $61 – a 25pc drop – as a sluggish global economic outlook slowed projected energy demand. That combined with concerns that Donald Trump's tariff onslaught from early April would further stymie global trade. Over recent weeks, though, as this Israeli-Iranian conflict has intensified, Brent crude has spiked back up to $75, largely due to fears of turmoil engulfing the Middle East Tehran, specifically, has threatened to close the Strait of Hormuz, at the mouth of the Persian Gulf, a critical route for 25pc of global oil and liquefied natural gas (LNG) flows daily. Were that to happen, oil would soar above $100 a barrel and way beyond – doing serious damage to oil importing nations, not least the UK. Even if that doesn't happen, the International Monetary Fund reckons a 10pc rise in oil prices raises inflation in advanced economies by about 0.4 percentage points – and we've seen a 20pc-plus rise over the last month. UK inflation, 3.4pc in May, could easily soar above 4pc and beyond – twice the Bank of England's target. Stand by for higher UK petrol and diesel prices, along with domestic gas price rises too, especially if the conflict disrupts LNG exports from Qatar and elsewhere in the Gulf. That will push up household and industrial bills, with knock-on effects on food prices too – with food price inflation already jumping from 3.4pc in April to 4.4pc in May. Such inflationary pressures would rule out any more cuts in the Bank of England's policy rates for the foreseeable future. Bond yields would also rise – not least on UK sovereign debt – compounding the difficulties of this big-spending Labour government to stabilise the public finances. Renewed cost of living crisis headlines would also increase risks of a damaging wage-price spiral, with the UK's public sector unions already squaring up for more conflict this autumn. And these trends would intensify, of course, if Hormuz closes – which Iran could do by using its submarine fleet to lay deep sea mines between its southern coast and Oman, a distance of 25 miles at the Strait's narrowest point. Other oil producers (not least US frackers) can offset the disruption of Iranian supplies – the country pumps 4pc of global production – but not supplies from the Gulf as a whole. The reality is, though, that Iran relies heavily on oil exports – and closing the Strait would starve an unpopular government of the revenues needed to keep a lid on domestic discontent. And with 85pc of the energy leaving Hormuz consumed on Asian markets, thwarting those flows would alienate neutral powers such as China and India. Iran would think hard before alienating these two in particular, which would rally international support against Tehran, strengthening regional rival Saudi Arabia. Attempting to close the Strait would also risk devastating military and potentially civilian losses for Iran, including its naval and coastal assets, if the US and powerful Gulf states engaged in sustained retaliation. But the main reason I don't think Iran will disrupt Hormuz is that Tehran gains more by threatening to close the Strait than by actually doing so. The mere threat of action can drive up oil prices, benefiting Iran's economy and strengthening Tehran's negotiating position, without risking the consequences of action. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Yahoo
29 minutes ago
- Yahoo
Why it's time to unshackle London and let it boom again
It is close to 40 years since the Big Bang reforms of London's financial markets transformed the City forever. A relatively technical programme of Thatcherite deregulation — the abolition of fixed commissions and the end of the separation of brokers and jobbers on the London Stock Exchange — opened the floodgates to a deluge of foreign capital and talent that lifted the tired old city affectionately known as The Smoke. Much of what we now associate with modern London, for good and for ill — the sky-high property prices, the gleaming towers of Docklands and the Square Mile, the unrecognisably improved restaurant scene, the world leadership position in exciting industries such as fintech — can be traced back to that bold Big Bang moment in October 1986. Yet now London seems to be going backwards. Not so much a reverse Big Bang as a slow slump, the proverbial balloon that is gradually losing its air. London is arguably suffering its biggest drain of talent and capital since the 1970s — and the warning signs are everywhere. The world's wealthy who flocked to London for its unrivalled lifestyle over decades are now, often reluctantly and sadly, calling it a day. We have been warned about the risk of an exodus from London many times before — notably after Brexit — and thankfully it has always turned out to be a false alarm. Ultimately the appeal of London always trumped the charms of Geneva, Paris or Frankfurt. This time it really does appear to be genuine. Even if you are sceptical, as many are, about the widely reported figures from consultants Henley & Partners suggesting the UK is losing a millionaire every 45 minutes, the anecdotal evidence is impossible to ignore. Ask any financial adviser. The scramble to leave London is real. Dubai alone has attracted tens of thousands of British expats over recent years, and not just for the weather. European countries such as Italy are also working hard to attract disillusioned London émigrés. The impact has been profound on the top end of the capital's property market. Prices in prime London addresses are still down more than 20 per cent on their 2014 peaks, and buyers are increasingly hard to find. Figures from analysts LonRes show the number of prime London homes for sale has ballooned 48 per cent since 2020. The abolition of non-dom tax status — proposed by former Tory chancellor Jeremy Hunt and confirmed and doubled down on by his Labour successor Rachel Reeves in the October Budget — was the tipping point for many, but it has been a long, slow build. The tax burden on London's wealthy has grown heavier with virtually every 'fiscal event' since the financial crisis, from Alistair Darling's tax allowance taper trap, to George Osborne's shake-ups of stamp duty, to Reeves's halving of the inheritance tax relief on AIM listed shares. This autumn's Budget will almost certainly be no exception, as the Chancellor struggles to keep within her fiscal rules while showering the largesse flagged in her spending review last week on much of the rest of the country. There is talk of a U-turn on the non-doms, perhaps lifting their foreign assets out of the inheritance tax net. That will be welcome, but how much damage has already been done? Many Londoners and non-Londoners alike might be tempted to pick up their tiny violins and ask, 'Why does any of this matter, why should we care if a few rich people flee to a mansion in another city in another country?' But that is to profoundly misunderstand London's role in the British economy. London has always acted as the wealth creation machine at the heart of UK PLC. Yes, it sucks in talent, but it also exports affluence, skills, and tax revenues to the rest of the country. In 2023, London individuals and businesses contributed a net fiscal surplus of £44 billion, up from £37.9billion in 2022. The capital and the South East were the only two regions that make a net contribution to the Exchequer, helping to subsidise public spending in every other part of the UK. Meanwhile the City's status is under threat. Big Bang propelled the Square Mile past Wall Street to make it the world's pre-eminent financial centre in the 1990s and 2000s. Now the City is having to fight to hold on to its leadership position even in Europe. The decision this month by Wise, the money transfer fintech giant, to switch its primary share listing from London to America, was hugely damaging symbolically. But, sadly, it was also no great surprise, following similar moves by the likes of plant hire company Ashtead and online gambling company Flutter. Meanwhile foreign bidders and private equity, much of it American, are hoovering up long-established London-listed businesses companies on an almost daily basis. Companies are choosing to be listed outside London. It is a depressing fact, but again, not surprising, that there has been a net outflow of investment in UK equities for 95 out of the 110 quarters since Brexit. The flight of capital is averaging around £13 billion a year. That sets up a negative feedback loop of lower share valuations that in turn makes it more likely that companies will take their share listings elsewhere. The truth is that successive Governments have neglected London for years, arguably since the financial crisis, when much of the country understandably felt disgust at the reckless activities of the relatively small number of bankers and traders that brought down the house of cards. But the City has cleaned up its act, and the unspoken political consensus that the country can only be levelled up by levelling London down must end. The political classes are still in thrall to the voters of the Midlands and the North who lent their support to the Leave campaign in 2016, to Boris Johnson's Tories in 2019, to Labour in 2024 and are now perhaps preparing to offer it up to Nigel Farage's Reform in 2029. It will not have gone unnoticed to Londoners that voting Labour in national elections gets you very little, even when the party occupies Downing Street. Already there are ominous early signs that Reform is now making inroads in boroughs where the party has barely registered on the political dial before. The Government can no longer take London's vote for granted. London is not in trouble, it is a remarkably resilient city, but it is not being allowed to fulfil its potential. If the UK is to break out of the growth slow lane it needs its great capital of nine million people to be unleashed and unshackled and once again drawing in the world's brightest talents. Over the coming weeks the Standard will be running a series of articles online and in print outlining in more detail the challenges London and the City face in achieving this long overdue revival and how they can be tackled
American Military News
32 minutes ago
- American Military News
Widespread pay cuts in China drive down consumer spending, fuel deflationary fears
This article was originally published by Radio Free Asia and is reprinted with permission. Chinese workers across industries are facing salary cuts and layoffs as mounting economic woes engulf China's public and private sectors, sources tell Radio Free Asia. That's forcing families to slash spending. It is also triggering deflationary concerns as businesses enter into desperate price wars. From Beijing's central government offices to provincial agencies across China, as well as major state-owned enterprises like investment bank China International Capital Corp (CICC), employees have faced substantial pay reductions that have reduced household budgets and fundamentally altered consumer spending patterns. 'I used to earn 6,000 yuan (or US$835) a month but now I only get 5,000 yuan (US$696), and some allowances have been removed too,' Li, an employee at a Beijing-based state-owned enterprise, told RFA. Like many others interviewed for this story, Li wanted to be identified by a single name for safety reasons. 'Some people in my wife's company have also had their salaries cut and some have received layoff notices, saying they will only work until July-end,' said Li. In Zhejiang, regarded one of China's most prosperous provinces, ordinary civil servants have had their annual salaries slashed by 50,000 to 60,000 yuan (or US$6,964-US$8,356) this year, Zheng, a resident of the province's Zhuji city, told RFA. Civil servants in more senior positions have seen deeper reductions to their annual pay of around 80,000 to 100,000 yuan (or US$11100-US$13900) and others in still higher levels by about 150,000 yuan (or US$20,890), Zheng said. 'There was already a reduction two years ago. This year's salary is reduced again,' he added. The cuts indicate the financial strain on local governments, as domestic economic challenges lead to tepid consumer demand and price pressures. That's impacting businesses' ability to pay taxes. Additionally, local governments are grappling with a decline in land transfer sales revenue amid weak property market demand. For 2025, China's provincial regions have set cautious fiscal revenue estimates, with an average growth target of 2.8% for their general public budget revenue, which is the sum of tax and non-tax revenue. That's down 1.6 percentage points from 2024's target average, as revenue generation challenges continue to weigh on local governments, economists say. For example, in Shandong, many real estate projects have been suspended for the past two years with no land sales recorded, impacting the local government's already large fiscal debt levels, said one blogger based in the northeastern coastal province, according to texts and pictures posted on X account @whyyoutouzhele, also known as 'Mr. Li is not your teacher,' who posts content on that platform to circumvent Chinese government censorship. Another Shandong resident, named Geng, told RFA, that county and township level officials in the province have had their salaries slashed by 30%, with payments frequently delayed. 'Now the county-level finances have been depleted, and the benefits for police officers have also been reduced,' Geng, a resident of Qingdao city, said. Police officers in many other regions have also seen significant cuts to their annual salaries, down to 200,000 yuan (US$27,856) this year from 300,000 yuan (US$41,784) a year ago, said a legal professional based in southeast China's Guangdong province. Employees of major Chinese state-owned commercial enterprises, such as investment bank CICC and China Development Bank, have not been spared either, with companies executing cost-cutting 'optimization measures,' including wage reductions and layoffs, amid a government campaign to cap pay ceilings at financial institutions and bring it more on par with other civil servants But an employee at CICC said the salary cuts have affected virtually all staff levels. 'Almost everyone in our building has had their salaries cut. The lowest-level employees have also had their salaries cut by 5%. I heard that the reductions for mid- and high-paid employees are even greater,' he said. According to a report from Beijing-based Caixin media group, 27 government-owned financial enterprises have begun to implement salary cuts, mainly aimed at reaching the goal of capping annual income of staff at these firms at 1 million yuan (US$139,180), as Beijing moves forward with a campaign, known as 'common prosperity' drive, to narrow income and wealth inequality. Ma, who works at a Beijing-based state-owned enterprise, said his company has already conducted two rounds of salary cuts and layoffs since 2023. 'The basic salary has shrunk, and the company has also cancelled meal and transportation subsidies,' Ma said. 'The work that used to be done by two or three people now has to be done by one person.' Another employee of a state-owned bank based in Guangdong's Dongguan city said his salary had been reduced by 30% in the past two years, with performance bonuses 'almost completely cut.' The salary reductions have sparked a sharp decline in consumer spending, creating deflationary pressures across the economy, as businesses engage in aggressive price cutting in a desperate bid to attract cash-strapped consumers. 'The price war has become the latest struggle for many small businesses,' Meng, a Shandong resident, told RFA. 'For example, the good ribs here only sell for 12 yuan (or US$1.67) a pound, and the purchase price of live pigs is only a few yuan … restaurants are desperately offering discounts to survive. This is not competition, but dragging each other down.' In Beijing, small supermarkets are 'slashing prices like crazy,' said Su, a resident of the city's Haidian District. 'I'm afraid they will all go bankrupt in a few months at this rate.' In her own home too, Su has observed major changes in spending patterns, with fewer family gatherings and less frequent restaurant meals, as household budgets tighten. Economist Wu Qinxue warned that the current situation highlights continued decline in local governments' fiscal levels and is not just a temporary belt-tightening. 'The (local) government has no money to manage people, and no one is willing to spend money,' he said. 'From salary cuts within the system to the collapse of consumption among ordinary people, the entire society is quietly forming a top-down (consumer belt-) 'tightening chain.''
