Exploring Undervalued Small Caps With Insider Action In Australia July 2024

The Australian market has shown robust performance, rising 2.1% over the last week and achieving a 10% increase over the past year with earnings expected to grow by 13% annually. In this context, identifying undervalued small-cap stocks with recent insider buying can be particularly compelling, as these actions often signal confidence in the company's future prospects amidst favorable market conditions.

Top 10 Undervalued Small Caps With Insider Buying In Australia

Name	PE	PS	Discount to Fair Value	Value Rating
Corporate Travel Management	17.5x	2.7x	47.07%	★★★★★★
Healius	NA	0.6x	40.97%	★★★★★☆
Eagers Automotive	9.7x	0.3x	32.81%	★★★★☆☆
Elders	22.8x	0.5x	43.62%	★★★★☆☆
Codan	29.5x	4.3x	25.69%	★★★★☆☆
Strike Energy	301.9x	73.9x	48.49%	★★★★☆☆
RAM Essential Services Property Fund	NA	5.9x	37.40%	★★★★☆☆
Tasmea	15.1x	1.0x	9.12%	★★★☆☆☆
Dicker Data	22.9x	0.8x	-3.95%	★★★☆☆☆
Coventry Group	304.0x	0.5x	-14.02%	★★★☆☆☆

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

We'll examine a selection from our screener results.

Elders (ASX:ELD)

Simply Wall St Value Rating: ★★★★☆☆

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

Operations: Branch Network, Wholesale Products, and Feed and Processing Services collectively generated A$3.00 billion in revenue, with Corporate Services contributing minimally. The gross profit margin observed a slight increase from 16.22% to 19.41% over the analyzed periods, reflecting improved efficiency in managing cost of goods sold relative to revenue.

PE: 22.8x

Elders Limited, an Australian firm, recently reaffirmed its fiscal 2024 EBIT forecast of A$120 million to A$140 million amidst a challenging backdrop with a significant drop in half-year sales from A$1.66 billion to A$1.34 billion and net income falling to A$11.59 million from last year's A$48.85 million. Despite these hurdles and a high debt level, insider confidence is evident as they recently purchased shares, signaling belief in the company’s resilience and future prospects.

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

• Gain insights into Elders' historical performance by reviewing our past performance report.

Neuren Pharmaceuticals (ASX:NEU)

Simply Wall St Value Rating: ★★★★★☆

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

Operations: Pharmaceutical Products generated A$231.94 million in revenue, with a high gross profit margin of 88.47%, reflecting significant efficiency in managing production costs relative to sales.

PE: 18.0x

Neuren Pharmaceuticals, a notable entity within Australia's lesser-known equity segment, recently showcased promising Phase 2 clinical trial results for NNZ-2591, targeting Pitt Hopkins syndrome—a condition lacking approved treatments. This development could significantly impact patient lives and market positioning. Financially, the company is poised for a modest annual earnings growth of 3.37%. Adding to investor optimism, insiders have recently demonstrated their confidence through share purchases, signaling potential undervalued status and aligning with strategic growth prospects presented at various industry conferences.

• Click to explore a detailed breakdown of our findings in Neuren Pharmaceuticals' valuation report.

• Gain insights into Neuren Pharmaceuticals' past trends and performance with our Past report.

Orora (ASX:ORA)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Orora is a company specializing in packaging solutions, operating primarily across Australasia and North America with a market capitalization of approximately A$3.20 billion.

Operations: Australasia and North America contribute significantly to the company's revenue, generating A$1.03 billion and A$3.02 billion respectively. The gross profit margin has shown a trend of fluctuation over the years, with recent figures around 18.75%.

PE: 18.5x

Orora's recent Analyst/Investor Day highlighted its strategic focus, aligning with a 14.68% forecasted annual earnings growth. Despite challenges in debt coverage by operating cash flow, the company maintains a low-risk funding structure with no reliance on customer deposits. Insider confidence is evident as they recently purchased shares, signaling belief in the firm’s prospects. This activity complements Orora's financial narrative, suggesting potential for growth despite some financial strains.

• Take a closer look at Orora's potential here in our valuation report.

• Assess Orora's past performance with our detailed historical performance reports.

Seize The Opportunity

• Unlock our comprehensive list of 21 Undervalued ASX Small Caps With Insider Buying by clicking here.
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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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