Over the last 7 days, the Australian market has remained flat, though it has risen 15% in the past 12 months. In this environment of anticipated earnings growth of 12% per annum over the next few years, identifying undervalued small-cap stocks with insider buying can present unique opportunities for investors.
Top 10 Undervalued Small Caps With Insider Buying In Australia
Overview: Centuria Capital Group is an investment manager specializing in property funds management, development, co-investments, and finance with a market cap of approximately A$1.50 billion.
Operations: Centuria Capital Group generates revenue primarily from Property Funds Management (A$167.03 million), Co-Investments (A$54.13 million), and Development (A$44.50 million). The company incurred A$131.75 million in COGS for the latest period, resulting in a gross profit of A$195.28 million and a gross profit margin of 59.71%. Operating expenses were A$33.78 million, with non-operating expenses at A$88.29 million, leading to a net income margin of 22.39%.
PE: 23.8x
Centuria Capital Group, a small cap in Australia, recently reported earnings for the year ending June 30, 2024. Sales dropped to A$327.03 million from A$370.12 million the previous year; however, net income more than doubled to A$73.21 million from A$32.29 million. Basic earnings per share rose to A$0.09 from A$0.04 last year, reflecting improved profitability despite revenue decline. Insider confidence is evident with recent share purchases by key executives this quarter, suggesting potential growth ahead as earnings are forecasted to grow annually by 10%.
Overview: Regal Partners is an investment management firm specializing in providing investment management services with a market cap of A$1.25 billion.
Operations: Regal Partners generates revenue primarily from investment management services. Recent financial data indicates a gross profit margin trend, peaking at 74.37% in Q2 2022 and showing a decrease to 41.67% by Q4 2023, with operating expenses and non-operating expenses contributing significantly to cost structures.
PE: 20.4x
Regal Partners has recently been added to the S&P Global BMI Index as of September 23, 2024, highlighting its growing recognition. The company reported a significant increase in revenue for H1 2024, reaching A$140.82 million from A$47.6 million a year ago, with net income at A$50.23 million compared to a previous net loss. Insider confidence is evident with recent share purchases by executives over the past six months, underscoring their belief in future growth potential despite reliance on external borrowing for funding.
Overview: Sims operates in the recycling and waste management industry, focusing on metal recycling and electronic lifecycle services, with a market cap of A$2.90 billion.
Operations: The company generates revenue primarily from North America Metals (A$4.49 billion) and Australia/New Zealand Metals (A$1.60 billion). For the period ending 2023-09-30, it reported a gross profit margin of 9.91% and net income margin of 1.99%. Operating expenses include significant non-operating expenses and depreciation & amortization costs, impacting overall profitability.
PE: 1315.3x
Sims Limited, a small cap in Australia, recently reported A$7.22 billion in sales for the year ended June 30, 2024, up from A$6.66 billion the previous year. Despite this growth, they faced a net loss of A$57.8 million compared to a net income of A$181.1 million last year due to large one-off items impacting results and lower profit margins (0.02%). Insider confidence is evident with notable share purchases over the past six months indicating potential value recognition within management circles.
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:CNI ASX:RPL and ASX:SGM.
