As February 2026 begins, U.S. markets have experienced a robust start with key indices like the Dow Jones Industrial Average and S&P 500 posting significant gains, reflecting renewed investor optimism amid positive economic indicators such as the expansion in manufacturing activity. In this dynamic environment, identifying small-cap stocks with potential for growth can be particularly rewarding; factors such as insider activity may offer additional insights into their valuation and future prospects.

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

Name	PE	PS	Discount to Fair Value	Value Rating
First United	9.8x	2.9x	46.48%	★★★★★☆
Bank of the James Financial Group	10.3x	1.9x	48.42%	★★★★☆☆
First Northern Community Bancorp	11.0x	3.2x	40.93%	★★★★☆☆
New Peoples Bankshares	9.8x	2.3x	39.22%	★★★☆☆☆
Union Bankshares	10.1x	2.1x	18.81%	★★★☆☆☆
Legacy Education	18.6x	2.0x	26.49%	★★★☆☆☆
Monro	NA	0.6x	33.22%	★★★☆☆☆
Angel Oak Mortgage REIT	13.0x	6.6x	37.14%	★★★☆☆☆
Dave & Buster's Entertainment	1830.0x	0.3x	-5210.49%	★★★☆☆☆
Hallador Energy	NA	1.9x	-16.18%	★★★☆☆☆

Let's take a closer look at a couple of our picks from the screened companies.

Citizens Financial Services (CZFS)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Citizens Financial Services operates primarily in community banking with a market capitalization of $0.28 billion.

Operations: The company's revenue has shown a consistent upward trend, reaching $109.97 million by the end of 2025. Operating expenses have also increased over time, with general and administrative expenses being a significant component. Notably, the net income margin has varied over the periods but was recorded at 33.26% in December 2025.

PE: 8.4x

Citizens Financial Services, a smaller player in the financial sector, recently showcased insider confidence with share purchases over the past year. The company reported net interest income of US$26.21 million for Q4 2025, up from US$22.87 million a year prior, alongside net income growth to US$10.48 million from US$7.98 million. Despite low bad loan allowances at 85%, its consistent earnings and dividends suggest resilience in navigating economic challenges while maintaining shareholder value through strategic board appointments and dividend affirmations.

Parke Bancorp (PKBK)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Parke Bancorp operates as a community bank, providing a range of financial services primarily focused on community banking, with a market capitalization of approximately $0.17 billion.

Operations: The company's revenue primarily comes from its community banking operations. Over recent periods, the net income margin has shown variability, reaching 52.62% at its peak and dipping to 33.72%. Operating expenses are a significant cost component, with general and administrative expenses consistently representing a substantial portion of these costs.

PE: 8.8x

Parke Bancorp, a smaller financial institution, has shown promising signs of value despite recent earnings declines. Their latest earnings report for the fourth quarter ending December 31, 2025, revealed net interest income of US$21.82 million and net income of US$11.08 million, both significantly up from the previous year. Insider confidence is evident as they have been purchasing shares over the past months. The company also completed a share buyback program worth US$10.75 million by repurchasing 501,153 shares since August 2024.

Midland States Bancorp (MSBI)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Midland States Bancorp operates as a diversified financial holding company providing banking and wealth management services, with a market cap of approximately $0.47 billion.

Operations: The company's primary revenue streams are derived from Banking and Wealth Management, with a notable contribution from the Banking segment at $193.44 million. Operating expenses, particularly General & Administrative expenses, constitute a significant portion of costs, reaching $156.77 million in recent periods. The company has experienced fluctuations in its net income margin, which reached -76.38% in the latest available data point due to negative net income figures.

PE: -3.0x

Midland States Bancorp's recent financial activities highlight its potential as an undervalued investment. The company reported a net loss of US$2.89 million for Q4 2025, significantly improved from the previous year's loss of US$30.77 million. They repurchased 457,222 shares for US$9.6 million by December 31, indicating strategic confidence in their stock value. Insider confidence was bolstered with share purchases during this period, suggesting optimism about future growth prospects amidst ongoing earnings improvements and dividend affirmations.

Summing It All Up

• Investigate our full lineup of 56 Undervalued US Small Caps With Insider Buying right 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.
• Take control of your financial future using Simply Wall St, offering free, in-depth knowledge of international markets to every investor.

Curious About Other Options?

• 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.