In the last week, the Australian market has been flat, though it has risen by 20% over the past year with earnings forecasted to grow by 12% annually. In this environment, identifying small-cap stocks that exhibit strong fundamentals and recent insider buying can present intriguing opportunities for investors seeking value.
Top 10 Undervalued Small Caps With Insider Buying In Australia
Overview: Corporate Travel Management is a global travel services company operating in Asia, Europe, North America, and Australia/New Zealand with a market capitalization of A$3.44 billion.
Operations: Corporate Travel Management generates revenue primarily from its travel services across various regions, with North America contributing the largest share. The company has seen fluctuations in its net income margin, which reached 15.34% as of December 2023. Operating expenses are a significant component of costs, with general and administrative expenses being a notable portion.
PE: 19.9x
Corporate Travel Management, a contender among undervalued stocks in Australia, shows insider confidence with Jamie Pherous acquiring 87,500 shares for A$1.4 million. Despite reliance on external funding, the company forecasts a 12.2% annual earnings growth. Recent auditor changes to Deloitte and an expanded buyback plan highlight strategic shifts. For the year ending June 2024, revenue rose to A$716.86 million from A$660.08 million previously, while net income increased to A$84.45 million from A$77.57 million.
Overview: Insignia Financial is a financial services company that provides advice, platforms, and asset management services, with a market cap of A$2.35 billion.
Operations: Insignia Financial generates revenue primarily from its Platforms segment, contributing A$1.16 billion, followed by the Advice and Asset Management segments. The company has seen fluctuations in its gross profit margin, reaching 36.72% as of October 2024. Operating expenses have shown variability but remain a significant component of the cost structure, impacting profitability.
PE: -12.0x
Insignia Financial, a small company in Australia, has recently faced challenges with a net loss of A$185.3 million for the year ending June 2024, contrasting with a previous net income of A$51.4 million. Despite this, there's insider confidence as insiders have been purchasing shares over the past few months. The company's earnings are forecasted to grow by 56% annually despite relying entirely on external borrowing for funding. Recent leadership changes may also influence future strategies and growth prospects.
Overview: Jumbo Interactive is a company that operates in the lottery industry, offering managed services, lottery retailing, and software-as-a-service solutions with a market capitalization of A$1.34 billion.
Operations: Jumbo Interactive generates revenue primarily from lottery retailing and software-as-a-service (SaaS) offerings, with significant contributions from managed services. The company's gross profit margin has shown a trend of fluctuation, reaching 84.04% in recent periods. Operating expenses are notably impacted by sales and marketing as well as general and administrative costs.
PE: 18.7x
Jumbo Interactive, a small player in the Australian market, shows potential for growth with sales reaching A$159.33 million and net income climbing to A$43.35 million for the year ending June 2024. This growth is underscored by insider confidence, as founder Mike Veverka purchased 6,900 shares worth approximately A$94,813 recently. The company seeks to expand through bolt-on acquisitions while maintaining a focus on earnings growth of over 7% annually. With Michael Malone joining as Director in September 2024 and an extended buyback plan until September 2025, Jumbo is positioning itself strategically for future opportunities despite relying solely on external borrowing for funding.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include ASX:CTD ASX:IFL and ASX:JIN.
