Insider Buying Highlights 3 Undervalued Small Caps In Australia

In the last week, the Australian market has remained flat, yet it has shown impressive growth of 20% over the past year with earnings forecasted to increase by 12% annually. In this context, identifying stocks that are potentially undervalued can be crucial for investors seeking opportunities in a stable yet growing market environment.

Top 10 Undervalued Small Caps With Insider Buying In Australia

Name	PE	PS	Discount to Fair Value	Value Rating
GWA Group	16.5x	1.5x	41.40%	★★★★★★
Aurelia Metals	NA	1.1x	46.78%	★★★★★☆
SHAPE Australia	14.3x	0.3x	33.63%	★★★★☆☆
Collins Foods	17.9x	0.7x	7.79%	★★★★☆☆
Corporate Travel Management	19.5x	2.3x	7.53%	★★★★☆☆
Tabcorp Holdings	NA	0.5x	19.19%	★★★★☆☆
Mader Group	23.4x	1.5x	43.90%	★★★☆☆☆
Dicker Data	20.4x	0.7x	-68.47%	★★★☆☆☆
Coventry Group	242.6x	0.4x	-19.48%	★★★☆☆☆
Abacus Storage King	12.2x	7.7x	-30.39%	★★★☆☆☆

Click here to see the full list of 25 stocks from our Undervalued ASX Small Caps With Insider Buying screener.

We're going to check out a few of the best picks from our screener tool.

Insignia Financial (ASX:IFL)

Simply Wall St Value Rating: ★★★★★☆

Overview: Insignia Financial operates in the financial services industry, providing advice, platforms, and asset management services, with a market capitalization of A$2.5 billion.

Operations: The company generates revenue primarily from its Platforms and Advice segments, with Platforms contributing A$1.16 billion and Advice generating A$527.9 million. The gross profit margin has shown a notable increase, reaching 36.72% in recent periods, indicating an improvement in managing cost of goods sold relative to revenue growth.

PE: -11.3x

Insignia Financial, a small-cap player in Australia, is experiencing insider confidence with recent share purchases. Despite reporting a net loss of A$185.3 million for the year ending June 2024, compared to a net income of A$51.4 million the previous year, earnings are forecasted to grow by 51% annually. The company faces higher risk due to reliance on external borrowing rather than customer deposits. Recent executive changes may influence future strategies and performance outcomes.

• Get an in-depth perspective on Insignia Financial's performance by reading our valuation report here.

• Learn about Insignia Financial's historical performance.

Mader Group (ASX:MAD)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Mader Group provides staffing and outsourcing services, with a market cap of A$1.08 billion.

Operations: Mader Group's primary revenue stream is derived from Staffing & Outsourcing Services, generating A$774.47 million. The company's cost structure includes significant expenses in Cost of Goods Sold (COGS) at A$612.49 million and Operating Expenses at A$89.97 million, impacting its profitability metrics. Notably, the gross profit margin has shown a trend reaching 22.92% as of the latest period ending June 2024, indicating efficiency in managing production costs relative to revenue generation over time.

PE: 23.4x

Mader Group, a dynamic player in Australia's market, recently joined the S&P Global BMI Index on September 23, 2024. Their fiscal year ending June 30, 2024, saw sales climb to A$774 million from A$609 million the previous year. Net income rose to A$50 million from A$39 million. Despite relying on external borrowing for funding, insider confidence is evident through recent share purchases. Looking ahead, Mader anticipates revenue of at least A$870 million and NPAT of at least A$57 million for fiscal 2025.

• Delve into the full analysis valuation report here for a deeper understanding of Mader Group.

• Gain insights into Mader Group's past trends and performance with our Past report.

Magellan Financial Group (ASX:MFG)

Simply Wall St Value Rating: ★★★★★☆

Overview: Magellan Financial Group is an Australian-based investment management firm specializing in global equities and infrastructure strategies, with a market capitalization of A$3.5 billion.

Operations: Magellan Financial Group generates revenue primarily from investment management services, which contribute significantly to its total income. Over recent periods, the company's net income margin has shown variability, with a notable increase to 63.07% in the latest quarter. Operating expenses include general and administrative costs as well as sales and marketing expenses, while non-operating expenses have fluctuated considerably over time.

PE: 8.6x

Magellan Financial Group, a smaller player in the Australian market, has extended its share buyback plan until April 2025. From July 2023 to June 2024, they repurchased nearly 685,571 shares for A$5.19 million, totaling about A$52.47 million since March 2022. Despite a forecasted earnings decline of 9.2% annually over three years and reliance on external borrowing for funding, Magellan's net income rose to A$238.76 million from A$182.66 million last year—indicating potential resilience amidst challenges.

• Click here and access our complete valuation analysis report to understand the dynamics of Magellan Financial Group.

• Gain insights into Magellan Financial Group's historical performance by reviewing our past performance report.

Seize The Opportunity

• Embark on your investment journey to our 25 Undervalued ASX Small Caps With Insider Buying selection here.
• Have you diversified into these companies? Leverage the power of Simply Wall St's portfolio to keep a close eye on market movements affecting your investments.
• Unlock the power of informed investing with Simply Wall St, your free guide to navigating stock markets worldwide.

Want To Explore Some Alternatives?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
• Find companies with promising cash flow potential yet trading below their fair value.

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.

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