Exploring Undervalued Small Caps With Insider Insights In Australia July 2024

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The Australian market has shown robust growth, climbing 3.0% in the past week and achieving a 10% increase over the last twelve months, with earnings projected to grow by 14% per annum. In this context, identifying undervalued small-cap stocks can offer potential opportunities for investors looking to capitalize on companies with promising prospects yet to be fully recognized by the broader market.

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

49.28%

★★★★★★

Healius

NA

0.6x

41.53%

★★★★★☆

Eagers Automotive

9.7x

0.3x

33.32%

★★★★☆☆

Elders

23.0x

0.5x

43.25%

★★★★☆☆

Codan

29.1x

4.3x

26.95%

★★★★☆☆

Strike Energy

301.9x

73.9x

48.54%

★★★★☆☆

Orora

18.9x

0.7x

41.73%

★★★★☆☆

RAM Essential Services Property Fund

NA

5.9x

37.41%

★★★★☆☆

Dicker Data

22.3x

0.8x

-0.95%

★★★☆☆☆

Coventry Group

325.0x

0.5x

-19.71%

★★★☆☆☆

Click here to see the full list of 21 stocks from our Undervalued ASX Small Caps With Insider Buying screener.

Let's uncover some gems from our specialized screener.

Elders

Simply Wall St Value Rating: ★★★★☆☆

Overview: Elders is an Australian company involved in providing a range of services and products across branch network operations, wholesale products, feed and processing services, with a market capitalization of approximately A$1.47 billion.

Operations: Branch Network is the primary revenue contributor, generating A$2.54 billion, supplemented by Wholesale Products and Feed and Processing Services at A$341.19 million and A$120.14 million respectively. The company's gross profit margin has shown variability over recent periods, with a recent figure of 0.194% as of mid-2024, reflecting changes in cost of goods sold and operational efficiency.

PE: 23.0x

Elders, reflecting a mix of challenges and potential, recently reaffirmed its earnings guidance for FY 2024 with expected EBIT between A$120 million to A$140 million. Despite a significant drop in sales and net income in the first half of the year, insider confidence is evident as they recently purchased shares, signaling belief in long-term value. The company's reliance on external borrowing underscores a higher-risk financial structure but also points to possible growth avenues from strategic leadership additions like Damien Frawley starting July 2024.

ASX:ELD Share price vs Value as at Jul 2024
ASX:ELD Share price vs Value as at Jul 2024

Neuren Pharmaceuticals

Simply Wall St Value Rating: ★★★★★☆

Overview: Neuren Pharmaceuticals is a company focused on the development of pharmaceutical products, specifically targeting neurological disorders, with a market capitalization of approximately A$231.94 million.