In June 2025, European markets are navigating a complex landscape marked by geopolitical tensions and economic adjustments, with the STOXX Europe 600 Index reflecting a downturn of 1.54% amid concerns over Middle East conflicts. As central banks across Europe hold or adjust interest rates to counter inflation pressures, small-cap stocks present unique opportunities for investors seeking value in an uncertain environment. Identifying promising small-cap stocks often involves looking for those with solid fundamentals and insider buying activity, which can signal confidence from those closest to the company’s operations.

Click here to see the full list of 72 stocks from our Undervalued European Small Caps With Insider Buying screener.

Let's review some notable picks from our screened stocks.

★★★☆☆☆

Italmobiliare is a diversified investment holding company with operations spanning various sectors including renewable energy, food, e-commerce, sportswear, and healthcare, and it has a market capitalization of approximately €1.73 billion.

The company's revenue streams are diversified across several segments, with Caffè Borbone contributing the highest at €334.53 million, followed by Italmobiliare at €140.15 million and Officina Profumo-Farmaceutica Di Santa Maria Novella at €69.97 million. The gross profit margin has shown variability, reaching 45.30% as of September 2024 after a period of fluctuations between 39.14% and 62.97%. Operating expenses include significant general and administrative costs, which were €132.77 million in December 2024, impacting overall profitability alongside non-operating expenses such as depreciation and amortization costs that have been consistently recorded over the periods reviewed.

PE: 11.5x

Italmobiliare's position as a smaller company in Europe offers intriguing investment potential, especially given recent insider confidence. In March 2025, an insider acquired 10,000 shares valued at €221,084. This move suggests belief in the company's future prospects. Despite relying solely on external borrowing for funding—considered higher risk—their earnings are projected to grow by 15.84% annually. The company also announced a dividend increase to €0.90 per share in April 2025, reflecting financial stability and shareholder commitment.