Exploring Undervalued Small Caps With Insider Actions In June 2024

In This Article:

Amidst a fluctuating Australian market, with the ASX200 experiencing a slight downturn and sectors like IT and Energy facing declines, small-cap stocks remain a focal point for investors seeking potential growth opportunities. The current economic backdrop, marked by challenges in global markets such as China's property sector woes, sets a complex stage for identifying undervalued small caps that could offer substantial value in these turbulent times.

Top 10 Undervalued Small Caps With Insider Buying In Australia

Name

PE

PS

Discount to Fair Value

Value Rating

Corporate Travel Management

17.2x

2.6x

46.02%

★★★★★★

Tabcorp Holdings

NA

0.6x

26.72%

★★★★★★

GUD Holdings

14.0x

1.4x

6.96%

★★★★★☆

Codan

27.6x

4.1x

24.68%

★★★★☆☆

Eagers Automotive

9.3x

0.3x

31.08%

★★★★☆☆

Fiducian Group

18.2x

3.2x

4.40%

★★★☆☆☆

Dicker Data

21.6x

0.8x

-1.94%

★★★☆☆☆

Smartgroup

17.3x

4.3x

48.62%

★★★☆☆☆

Coventry Group

285.2x

0.4x

-28.14%

★★★☆☆☆

Lynch Group Holdings

NA

0.4x

-14.28%

★★★☆☆☆

Click here to see the full list of 27 stocks from our Undervalued ASX Small Caps With Insider Buying screener.

Let's take a closer look at a couple of our picks from the screened companies.

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 its revenue primarily from communications and metal detection, contributing A$291.50 million and A$212.20 million respectively. It has observed a net income margin of 14.67% as of the most recent period, alongside a gross profit margin that stands at 54.42%.

PE: 27.6x

Recently, insiders at Codan have shown their confidence through share purchases, signaling a potential undervalued opportunity in this lesser-known Australian entity. With earnings expected to grow by 16% annually, the company's financial health appears robust. This insider activity, coupled with promising growth forecasts, suggests that Codan might be poised for future value realization despite its reliance on higher-risk funding sources. Such dynamics offer an intriguing blend of risk and potential reward for discerning investors looking beyond mainstream options.

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

Dicker Data

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Dicker Data is a wholesale distributor of computer peripherals, with a market capitalization of approximately A$2.27 billion.