3 Top Undervalued Small Caps In Australia With Insider Buying

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The market has climbed 2.5% in the last 7 days, led by the Financials sector with a gain of 4.5%. Over the past 12 months, it is up 11%, with earnings forecast to grow by 13% annually. In this favorable environment, identifying undervalued small-cap stocks with insider buying can offer significant opportunities for investors looking to capitalize on potential growth and solid fundamentals.

Top 10 Undervalued Small Caps With Insider Buying In Australia

Name

PE

PS

Discount to Fair Value

Value Rating

Healius

NA

0.6x

45.30%

★★★★★☆

Elders

23.2x

0.5x

48.49%

★★★★☆☆

Eagers Automotive

9.7x

0.3x

40.17%

★★★★☆☆

Neuren Pharmaceuticals

12.7x

8.6x

-50.18%

★★★★☆☆

RAM Essential Services Property Fund

NA

6.1x

43.18%

★★★★☆☆

Dicker Data

23.0x

0.8x

7.10%

★★★☆☆☆

Codan

31.0x

4.5x

30.97%

★★★☆☆☆

Deterra Royalties

11.6x

7.7x

13.89%

★★★☆☆☆

Kelsian Group

47.3x

0.8x

27.64%

★★★☆☆☆

Coventry Group

297.7x

0.5x

-0.14%

★★★☆☆☆

Click here to see the full list of 14 stocks from our Undervalued ASX Small Caps With Insider Buying screener.

Let's dive into some prime choices out of from the screener.

Eagers Automotive

Simply Wall St Value Rating: ★★★★☆☆

Overview: Eagers Automotive operates primarily in car retailing and has a market cap of approximately A$3.58 billion.

Operations: The company generates revenue primarily from car retailing, with a gross profit margin of 18.60% as of the latest period. Operating expenses and non-operating expenses significantly impact net income, which stands at A$281.1 million for the most recent period.

PE: 9.7x

Eagers Automotive, a small cap in Australia, recently announced a share repurchase program to buy back up to 25.8 million shares by June 2025, reflecting insider confidence. As of June 11, 2024, the company has issued 258.2 million shares. CEO Keith Thornton emphasized their commitment to exceeding revenue growth guidance for 2024 and pursuing accretive M&A opportunities. Despite high debt levels and reliance on external borrowing, Eagers forecasts annual revenue growth of 5.52%, though earnings may decline slightly by an average of 0.7% over the next three years (A$).

ASX:APE Share price vs Value as at Aug 2024
ASX:APE Share price vs Value as at Aug 2024

Kelsian Group

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Kelsian Group operates in the transportation sector, providing bus services in Australia and internationally, as well as marine and tourism services, with a market cap of A$1.51 billion.

Operations: The company generates revenue primarily through its Australian Bus, International Bus, and Marine and Tourism segments. For the period ending December 31, 2023, revenue reached A$1.73 billion with a gross profit of A$441.02 million. The net income margin was 1.71%.