In this article, we discuss 5 undervalued small cap stocks to buy now. If you want our comprehensive analysis of these stocks, go directly to 10 Undervalued Small-Cap Stocks to Buy Now.
5. The Aaron’s Company, Inc. (NYSE:AAN)
Number of Hedge Fund Holders: 16
P/E Ratio as of March 7: 6.77
Market Capitalization as of March 7: $1.47 billion
Headquartered in Atlanta, Georgia, The Aaron’s Company, Inc. (NYSE:AAN) offers lease-to-own and purchase solutions, selling furniture, appliances, electronics, computers, and accessories through franchised stores and an e-commerce platform in the United States and Canada. On February 24, The Aaron’s Company, Inc. (NYSE:AAN) posted its fourth quarter results, exceeding market consensus for earnings and revenue.
On March 2, The Aaron’s Company, Inc. (NYSE:AAN) increased its share repurchase authorization to $250 million from the original $150 million plan. The program was also extended by one year to December 31, 2024. As of March 2, approximately $147 million remains available under this new authorization limit.
The Aaron’s Company, Inc. (NYSE:AAN) on February 21 declared a $0.1125 per share quarterly dividend, a 12.5% increase from its prior dividend of $0.10. The dividend is payable on April 5, to shareholders of record on March 17.
The Aaron’s Company, Inc. (NYSE:AAN) announced that it has entered into a definitive agreement to acquire BrandsMart U.S.A. on February 23, for a total consideration of approximately $230 million in cash, and the transaction is expected to close in the second quarter of 2022. With this transaction, the management believes that The Aaron’s Company, Inc. (NYSE:AAN) will deliver over $3 billion in total annual revenues and over $300 million in adjusted EBITDA by year-end 2026.
A total of 16 hedge funds were bullish on The Aaron’s Company, Inc. (NYSE:AAN) in Q4 2021, compared to 17 funds in the previous quarter. The collective stakes held in the fourth quarter amounted to $59 million.
4. ACCO Brands Corporation (NYSE:ACCO)
Number of Hedge Fund Holders: 17
P/E Ratio as of March 7: 7.95
Market Capitalization as of March 7: $794.12 million
ACCO Brands Corporation (NYSE:ACCO) manufactures and markets consumer, school, technology, and office products, such as computer and gaming accessories, calendars, school notebooks, storage and organization products, writing instruments and art products, and do-it-yourself tools, among others. With a price to earnings ratio of 7.95, ACCO Brands Corporation (NYSE:ACCO) is one of the top undervalued small-cap stocks to buy now.
In its Q4 earnings report, published on February 15, ACCO Brands Corporation (NYSE:ACCO) reported an EPS of $0.54, surpassing estimates by $0.06. Revenue over the period increased roughly 24% year-over-year to $570.30 million, above market consensus by $9.37 million.
According to the fourth quarter database of Insider Monkey, 17 hedge funds were long ACCO Brands Corporation (NYSE:ACCO), up from 14 funds in the quarter prior. Millennium Management is the largest shareholder of the company, owning 952,410 shares valued at $7.8 million.
3. A10 Networks, Inc. (NYSE:ATEN)
Number of Hedge Fund Holders: 20
P/E Ratio as of March 7: 11.51
Market Capitalization as of March 7: $1.06 billion
A10 Networks, Inc. (NYSE:ATEN) is a California-based provider of application delivery controllers and networking solutions to customers in the United States, Japan, other Asia Pacific, and EMEA countries. A10 Networks, Inc. (NYSE:ATEN)’s market capitalization on March 7 was $1.06, making it a notable undervalued small-cap contender.
A10 Networks, Inc. (NYSE:ATEN) on February 10 declared a $0.05 per share quarterly dividend, in line with previous. The dividend was paid on March 1, to shareholders of record on February 15. The company’s revenue and earnings for the quarter ending December 2021 came in above market consensus.
According to the fourth quarter database of Insider Monkey, 20 hedge funds held long positions in A10 Networks, Inc. (NYSE:ATEN), up from 14 funds in the previous quarter. Renaissance Technologies is the leading stakeholder of the company, with approximately 3 million shares worth almost $49 million.
2. The Buckle, Inc. (NYSE:BKE)
Number of Hedge Fund Holders: 28
P/E Ratio as of March 7: 7.31
Market Capitalization as of March 7: $1.745 billion
The Buckle, Inc. (NYSE:BKE) is a retailer of casual apparel, footwear, and accessories in the United States. The company was incorporated in 1948 and is headquartered in Kearney, Nebraska. Sidoti initiated coverage of The Buckle, Inc. (NYSE:BKE) on December 14 with a Buy rating and a $60 price target.
The Buckle, Inc. (NYSE:BKE) on March 3 announced that comparable store net sales for the 4-week period ended February 26, 2022 increased 33.3% year-over-year.
On December 6, The Buckle, Inc. (NYSE:BKE) declared a $0.35 per share quarterly dividend, a 6.1% increase from its prior dividend of $0.33. The dividend was paid on December 29. Additionally, the board declared a special dividend of $5.65 payable along with the quarterly dividend.
Elite hedge funds are exceedingly bullish on The Buckle, Inc. (NYSE:BKE). In the fourth quarter of 2021, 28 hedge funds were bullish on The Buckle, Inc. (NYSE:BKE), up from 23 funds in the earlier quarter. Ken Heebner’s Capital Growth Management is the biggest shareholder of the company, with 840,000 shares worth $35.5 million.
1. Abercrombie & Fitch Co. (NYSE:ANF)
Number of Hedge Fund Holders: 29
P/E Ratio as of March 7: 6.48
Market Capitalization as of March 7: $1.543 billion
Abercrombie & Fitch Co. (NYSE:ANF) offers a price to earnings ratio of 6.48 and a market capitalization of $1.543 billion as of March 7, making it a significant undervalued small-cap stock to buy now. Abercrombie & Fitch Co. (NYSE:ANF) was founded in 1892 and is headquartered in New Albany, Ohio, and the company markets and sells apparel, personal care products, and accessories under the Hollister, Abercrombie & Fitch, Abercrombie Kids, Moose, Seagull, and Gilly Hicks brands.
On March 3, B. Riley analyst Susan Anderson lowered the price target on Abercrombie & Fitch Co. (NYSE:ANF) to $48 from $54 but kept a Buy rating on the shares following the Q4 results. The analyst believes there is upside for both Abercrombie & Fitch Co. (NYSE:ANF)’s sales and EBIT margins in 2022 as management did not anticipate international demand to recover and consumers continuing to refresh their wardrobes.
Among the hedge funds tracked by Insider Monkey, 29 funds were long Abercrombie & Fitch Co. (NYSE:ANF) in Q4 2021, compared to 31 funds in the preceding quarter. Paradice Investment Management is the leading shareholder of the company, with 2.7 million shares worth $96.8 million.
You can also take a look at 10 Best Undervalued Stocks According to Hedge Funds and 10 Best Dow Dividend Stocks to Double Your Income.
