Exploring Undervalued Small Caps With Insider Action In Australia June 2024

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Over the last 7 days, the Australian market has remained flat, though it has shown a robust increase of 9.9% over the past year with earnings forecasted to grow by 14% annually. In this context, identifying undervalued small-cap stocks with insider buying can be particularly compelling as these actions often signal confidence in the company's future prospects amidst current market conditions.

Top 10 Undervalued Small Caps With Insider Buying In Australia

Name

PE

PS

Discount to Fair Value

Value Rating

Corporate Travel Management

17.8x

2.7x

39.96%

★★★★★★

Neuren Pharmaceuticals

16.5x

11.1x

46.55%

★★★★★★

Tabcorp Holdings

NA

0.6x

23.48%

★★★★★☆

Codan

27.6x

4.0x

24.75%

★★★★☆☆

GUD Holdings

14.7x

1.5x

2.71%

★★★★☆☆

Eagers Automotive

10.0x

0.3x

27.12%

★★★★☆☆

Orora

18.2x

0.6x

37.47%

★★★★☆☆

Dicker Data

21.3x

0.8x

-0.40%

★★★☆☆☆

Gold Road Resources

15.5x

3.8x

46.20%

★★★☆☆☆

Coventry Group

268.4x

0.4x

-22.67%

★★★☆☆☆

Click here to see the full list of 26 stocks from our Undervalued ASX Small Caps With Insider Buying screener.

We're going to check out a few of the best picks from our screener tool.

Eagers Automotive

Simply Wall St Value Rating: ★★★★☆☆

Overview: Eagers Automotive is an automotive retailer primarily engaged in car retailing, with a market capitalization of approximately A$3.5 billion.

Operations: Car Retailing is the primary revenue generator, contributing A$9.85 billion, with a notable gross profit margin of 18.60%. Over recent periods, gross margins have shown slight fluctuations but remain under 19%, indicating consistency in cost management relative to sales.

PE: 10.0x

Eagers Automotive, amid its strategic expansion, recently announced a significant share repurchase program, planning to buy back 10% of its shares by June 2025—a move reflecting strong insider confidence. Concurrently, the company is actively pursuing mergers and acquisitions to bolster its revenue, which is projected to grow annually. Despite a high debt level and reliance on external borrowing posing risks, these aggressive growth tactics coupled with insider purchases suggest a potentially underappreciated asset in the market.

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

GUD Holdings

Simply Wall St Value Rating: ★★★★☆☆

Overview: GUD Holdings is a diversified company that operates in the automotive and water products industries, with a market capitalization of approximately A$1.08 billion.

Operations: APG and Automotive segments collectively generated A$955.64 million in revenue, with the company achieving a gross profit margin of 43.53% by the end of the most recent fiscal period. The net income for this period was A$106.997 million, reflecting a net income margin of approximately 9.94%.