Codan Leads Three Undervalued Small Caps With Insider Actions In Australia

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In recent trading sessions, the Australian market has shown mixed signals with the ASX200 marginally up by 0.1%. Notably, the IT sector outperformed, gaining 0.9%, while materials faced a downturn, nearly losing 1%. In such a fluctuating environment, identifying undervalued small-cap stocks like Codan that show potential for growth becomes crucial for investors looking for opportunities amidst broader market movements.

Top 10 Undervalued Small Caps With Insider Buying In Australia

Name

PE

PS

Discount to Fair Value

Value Rating

Corporate Travel Management

17.3x

2.6x

41.40%

★★★★★★

Nick Scali

14.1x

2.6x

42.26%

★★★★★☆

Healius

NA

0.6x

45.22%

★★★★★☆

Codan

29.1x

4.3x

20.83%

★★★★☆☆

Eagers Automotive

9.7x

0.3x

29.51%

★★★★☆☆

Elders

20.2x

0.4x

47.39%

★★★★☆☆

Tabcorp Holdings

NA

0.7x

19.50%

★★★★☆☆

RAM Essential Services Property Fund

NA

5.8x

39.21%

★★★★☆☆

Dicker Data

21.2x

0.8x

-0.10%

★★★☆☆☆

Coventry Group

295.6x

0.4x

-32.12%

★★★☆☆☆

Click here to see the full list of 29 stocks from our Undervalued ASX Small Caps With Insider Buying screener.

Let's explore several standout options from the results in the screener.

Codan

Simply Wall St Value Rating: ★★★★☆☆

Overview: Codan is a diversified technology company specializing in communications equipment and metal detection, with a market capitalization of approximately A$1.07 billion.

Operations: The company generates revenue primarily from Communications and Metal Detection, contributing A$291.50 million and A$212.20 million respectively. Gross profit margin has shown a notable increase, rising from 59.60% in September 2013 to 54.42% by December 2024, reflecting changes in cost of goods sold and operational efficiencies over time.

PE: 29.1x

Recently, insider confidence in Codan has been underscored by their share purchases, signaling strong belief in the company's prospects. With earnings expected to grow by 16% annually, this highlights its potential despite reliance on higher-risk funding sources. This Australian firm, often overlooked due to its smaller market presence, offers intriguing growth possibilities rooted in solid insider buying activities and financial forecasts. Such dynamics suggest that Codan might be poised for noteworthy advancements in its sector.

ASX:CDA Share price vs Value as at Jun 2024
ASX:CDA Share price vs Value as at Jun 2024

Clarity Pharmaceuticals

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Clarity Pharmaceuticals is a company focused on the development of radiopharmaceuticals.

Operations: Radiopharmaceutical Development generates A$9.49 million in revenue, consistently achieving a gross profit margin of 100%. The company experiences substantial operating losses, with net income margins worsening over time to -3.22% by the end of 2024 due to escalating R&D expenses, which reached A$36.37 million.