Exploring Codan And Two More Top Undervalued Small Caps With Insider Actions In Australia

The Australian market has shown resilience, remaining stable in the past week and achieving an 8.4% increase over the past year, with earnings expected to grow by 13% annually. In this context, identifying undervalued small-cap stocks with insider buying actions can offer potential opportunities for informed investors looking to capitalize on market inefficiencies.

Top 10 Undervalued Small Caps With Insider Buying In Australia

Name	PE	PS	Discount to Fair Value	Value Rating
Neuren Pharmaceuticals	16.9x	11.4x	47.56%	★★★★★☆
Healius	NA	0.6x	42.00%	★★★★★☆
Elders	23.2x	0.5x	42.64%	★★★★☆☆
Eagers Automotive	9.7x	0.3x	33.66%	★★★★☆☆
Codan	30.2x	4.4x	24.39%	★★★★☆☆
RAM Essential Services Property Fund	NA	5.9x	37.18%	★★★★☆☆
Dicker Data	22.2x	0.8x	-0.46%	★★★☆☆☆
Smartgroup	17.8x	4.4x	48.56%	★★★☆☆☆
Gold Road Resources	16.9x	4.2x	45.58%	★★★☆☆☆
Coventry Group	297.7x	0.5x	-12.02%	★★★☆☆☆

Click here to see the full list of 17 stocks from our Undervalued ASX Small Caps With Insider Buying screener.

Here's a peek at a few of the choices from the screener.

Codan (ASX:CDA)

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$1.09 billion.

Operations: The Communications and Metal Detection segments significantly contribute to the revenue, generating A$291.50 million and A$212.20 million respectively. The company's gross profit margin has shown a trend of fluctuation, with a notable figure of approximately 54% in the most recent period recorded.

PE: 30.2x

Recently, Codan has demonstrated insider confidence with strategic share purchases, underscoring a positive outlook from those within. With earnings expected to grow by 16.2% annually, this reflects not just potential but a solid trajectory in an often-overlooked sector. Despite relying solely on external borrowing—a higher risk funding method—these moves suggest a robust strategy tailored for growth. This blend of financial health and insider activity paints Codan as a compelling player among undervalued entities in Australia's market landscape.

• Dive into the specifics of Codan here with our thorough valuation report.

• Review our historical performance report to gain insights into Codan's's past performance.

Elders (ASX:ELD)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Elders is an agribusiness company operating in branch network services, wholesale products, and feed and processing services, with a market capitalization of approximately A$1.56 billion.

Operations: Branch Network generates the majority of revenue at A$2.54 billion, followed by Wholesale Products and Feed and Processing Services contributing A$341.19 million and A$120.14 million, respectively. The company has experienced a gross profit margin fluctuation, with a notable increase to 0.194% in the latest period reported from an earlier figure of 0.162%.

PE: 23.2x

Despite a challenging year with net profit margins dropping from 3.4% to 2.1%, Elders Limited has shown resilience, reaffirming its earnings guidance for FY2024 with expected EBIT between A$120 million and A$140 million. Recently appointed director Glenn Davis brings extensive legal and corporate governance experience, potentially strengthening the board's strategic oversight. Insider confidence is evident as they recently purchased shares, signaling belief in the company's future prospects amidst current financial strains.

• Click here to discover the nuances of Elders with our detailed analytical valuation report.

• Understand Elders' track record by examining our Past report.

NRW Holdings (ASX:NWH)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: NRW Holdings is an Australian company engaged in civil contracting and mining services with a diverse revenue stream across sectors such as MET, civil, and mining.

Operations: The company generates a significant portion of its revenue from the Mining sector, contributing A$1.49 billion, followed by MET and Civil sectors with revenues of A$739.07 million and A$593.62 million respectively. Over recent periods, it has observed a gross profit margin fluctuation, with the latest being 47.41%.

PE: 17.2x

NRW Holdings, a noteworthy player in the Australian market, recently reaffirmed its revenue expectations at A$2.9 billion for FY 2024, signaling stability amidst its operations. With earnings projected to grow by 13% annually, the company's financial health appears robust. Notably, insiders have recently demonstrated their confidence through substantial share purchases, reinforcing a positive outlook on the company’s prospects. This activity complements NRW's completion of a A$5.26 million equity offering at A$2.56 per share earlier this month, underscoring both resilience and potential for growth in its sector.

• Delve into the full analysis valuation report here for a deeper understanding of NRW Holdings.

• Evaluate NRW Holdings' historical performance by accessing our past performance report.

Next Steps

• Navigate through the entire inventory of 17 Undervalued ASX Small Caps With Insider Buying here.
• Hold shares in these firms? Setup your portfolio in Simply Wall St to seamlessly track your investments and receive personalized updates on your portfolio's performance.
• Join a community of smart investors by using Simply Wall St. It's free and delivers expert-level analysis on worldwide markets.

Curious About Other Options?

• 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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