3 Undervalued Small Caps In Australia With Insider Buying

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Over the last 7 days, the Australian market has risen 1.7%, driven by gains of 12% in the Materials sector, although the Financials sector is down 3.2%. Over the past 12 months, the market is up 17%, with earnings forecast to grow by 12% annually. In this context, identifying undervalued small-cap stocks with insider buying can be a strategic move for investors looking to capitalize on potential growth opportunities within a robust market environment.

Top 10 Undervalued Small Caps With Insider Buying In Australia

Name

PE

PS

Discount to Fair Value

Value Rating

GWA Group

16.3x

1.5x

41.91%

★★★★★★

Magellan Financial Group

7.5x

4.8x

37.48%

★★★★★☆

Bigtincan Holdings

NA

1.1x

48.65%

★★★★★☆

Tabcorp Holdings

NA

0.5x

20.01%

★★★★★☆

Mader Group

21.0x

1.4x

49.66%

★★★★☆☆

Centuria Capital Group

23.2x

5.2x

41.48%

★★★★☆☆

Eagers Automotive

11.0x

0.3x

36.82%

★★★★☆☆

Dicker Data

21.1x

0.8x

-73.23%

★★★☆☆☆

Coventry Group

221.9x

0.4x

-11.64%

★★★☆☆☆

Corporate Travel Management

21.9x

2.6x

-2.46%

★★★☆☆☆

Click here to see the full list of 24 stocks from our Undervalued ASX Small Caps With Insider Buying screener.

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

Eagers Automotive

Simply Wall St Value Rating: ★★★★☆☆

Overview: Eagers Automotive is a major car retailing company with operations primarily focused on the automotive sector and a market cap of approximately A$3.81 billion.

Operations: The company generates revenue primarily from car retailing, with a gross profit margin of 18.37% as of the latest period. Operating expenses and non-operating expenses are significant cost components, impacting net income margins which stood at 2.47%.

PE: 11.0x

Eagers Automotive, a small Australian company, recently reported A$5.46 billion in sales for the first half of 2024, up from A$4.82 billion the previous year. Despite this growth, net income dipped to A$116 million from A$137.76 million. Insider confidence is evident with Nicholas Politis purchasing 200,000 shares worth approximately A$2.09 million between July and August 2024. The company's reliance on external borrowing highlights its higher risk profile but also underscores potential undervaluation opportunities for investors seeking growth in smaller companies.

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

Neuren Pharmaceuticals

Simply Wall St Value Rating: ★★★★★☆

Overview: Neuren Pharmaceuticals develops therapies for neurodevelopmental disorders and has a market cap of A$1.20 billion.

Operations: Neuren Pharmaceuticals generates revenue primarily from product sales, with recent figures showing a significant increase to A$193.34 million as of June 30, 2024. The company's cost of goods sold (COGS) for the same period was A$32.90 million, resulting in a gross profit margin of 82.98%. Operating expenses are relatively low compared to revenue, at A$5.28 million for the quarter ending June 30, 2024. Net income reached A$117.29 million with a net income margin of 60.67% during this period.