In This Article:
The Australian market has climbed 2.0% in the last 7 days and is up 6.4% over the last 12 months, with earnings expected to grow by 13% per annum over the next few years. In this favorable environment, identifying undervalued small-cap stocks with notable insider activity can present compelling investment opportunities.
Top 10 Undervalued Small Caps With Insider Buying In Australia
| Name | PE | PS | Discount to Fair Value | Value Rating |
|---|---|---|---|---|
| Healius | NA | 0.6x | 47.07% | ★★★★★☆ |
| Elders | 22.6x | 0.5x | 49.87% | ★★★★☆☆ |
| Eagers Automotive | 9.6x | 0.3x | 41.11% | ★★★★☆☆ |
| Codan | 30.1x | 4.4x | 33.11% | ★★★★☆☆ |
| Neuren Pharmaceuticals | 12.7x | 8.6x | -14.84% | ★★★★☆☆ |
| Coventry Group | 291.5x | 0.4x | 1.59% | ★★★★☆☆ |
| RAM Essential Services Property Fund | NA | 6.0x | 43.93% | ★★★★☆☆ |
| Dicker Data | 22.8x | 0.8x | 8.04% | ★★★☆☆☆ |
| Deterra Royalties | 11.6x | 7.7x | 14.06% | ★★★☆☆☆ |
| Kelsian Group | 46.0x | 0.8x | 29.44% | ★★★☆☆☆ |
Let's dive into some prime choices out of from the screener.
Eagers Automotive
Simply Wall St Value Rating: ★★★★☆☆
Overview: Eagers Automotive is a leading Australian automotive retail group specializing in car retailing and property management with a market cap of A$3.50 billion.
Operations: Car Retailing generates the majority of revenue, reaching A$9.85 billion. Gross profit margin has shown fluctuations, peaking at 19.13% in June 2022 and most recently recorded at 18.60% in December 2023. Operating expenses are significant, with General & Administrative Expense being a major component, amounting to A$730.16 million by December 2023.
PE: 9.6x
Eagers Automotive, a player in the Australian market, is making strategic moves to bolster its position. The company recently announced a share repurchase program on June 11, 2024, aiming to buy back up to 25.8 million shares by June 30, 2025. Despite high debt levels and reliance on external borrowing for funding, Eagers is actively seeking acquisitions and investments as part of its Next100 Strategy. Revenue is forecasted to grow by 5.52% annually; however, earnings are expected to decline slightly by an average of 0.7% per year over the next three years
Codan
Simply Wall St Value Rating: ★★★★☆☆
Overview: Codan is a company specializing in metal detection and communications technology, with a market cap of approximately A$1.40 billion.
Operations: Codan's revenue streams are primarily derived from Communications (A$291.50 million) and Metal Detection (A$212.20 million). The company's gross profit margin has shown a downward trend, moving from 0.56473% in June 2020 to 0.54424% in December 2023, indicating increasing cost pressures or changes in pricing strategy over this period.