3 Undervalued Small Caps In Australia With Insider Buying

Over the last 7 days, the Australian market has remained flat, yet it has seen a 15% increase over the past year with earnings forecasted to grow by 12% annually. In this context, identifying undervalued small-cap stocks with insider buying can offer promising opportunities for investors looking to capitalize on potential growth.

Top 10 Undervalued Small Caps With Insider Buying In Australia

Name	PE	PS	Discount to Fair Value	Value Rating
Magellan Financial Group	7.5x	4.7x	37.92%	★★★★★☆
GWA Group	16.5x	1.5x	41.37%	★★★★★☆
Bigtincan Holdings	NA	1.2x	47.21%	★★★★★☆
Tabcorp Holdings	NA	0.4x	23.66%	★★★★★☆
SHAPE Australia	14.0x	0.3x	35.44%	★★★★☆☆
Bapcor	NA	0.9x	43.70%	★★★★☆☆
Dicker Data	21.5x	0.8x	-75.63%	★★★☆☆☆
Corporate Travel Management	22.0x	2.6x	-3.81%	★★★☆☆☆
BSP Financial Group	7.8x	2.8x	1.71%	★★★☆☆☆
Credit Corp Group	21.0x	2.8x	40.02%	★★★☆☆☆

Click here to see the full list of 24 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.

Corporate Travel Management (ASX:CTD)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Corporate Travel Management is a global travel services company with operations in Asia, Europe, North America, and Australia/New Zealand, and a market cap of A$2.71 billion.

Operations: The company's revenue primarily comes from its travel services across Asia (A$63.66 million), Europe (A$168.32 million), North America (A$309.63 million), and Australia and New Zealand (A$168.82 million). The net income margin has shown variability, with recent figures reflecting 0.11888% for the quarter ending June 2024, while gross profit margins have ranged between 0.32361% and 0.49974% over the past several years, indicating fluctuating profitability levels in relation to cost of goods sold and operating expenses.

PE: 22.0x

Corporate Travel Management, a smaller player in the Australian market, has shown promising signs of being undervalued. Insider confidence is evident as Jamie Pherous purchased 87,500 shares valued at A$1.4 million between January and June 2024. The company repurchased 1,488,232 shares for A$23.14 million during this period and extended its buyback plan to June 2025 with an additional A$26.1 million authorization. Earnings grew to A$84.45 million from A$77.57 million year-over-year ending June 30, 2024, reflecting solid revenue growth and profitability prospects ahead.

• Unlock comprehensive insights into our analysis of Corporate Travel Management stock in this valuation report.

• Review our historical performance report to gain insights into Corporate Travel Management's's past performance.

Neuren Pharmaceuticals (ASX:NEU)

Simply Wall St Value Rating: ★★★★★☆

Overview: Neuren Pharmaceuticals is a biopharmaceutical company focused on developing therapies for neurodevelopmental and neurodegenerative disorders, with a market cap of approximately A$1.20 billion.

Operations: Neuren Pharmaceuticals generates revenue primarily from product sales, with recent quarterly revenue reaching A$193.34 million. The company’s cost of goods sold (COGS) for the same period was A$32.90 million, resulting in a gross profit margin of 82.98%. Operating expenses include general and administrative costs, which were A$5.28 million in the latest quarter. Net income for this period was A$117.29 million, yielding a net income margin of 60.67%.

PE: 15.6x

Neuren Pharmaceuticals, a small cap in Australia, recently reported earnings for the half year ending June 30, 2024. Sales dropped to A$24.33 million from A$62.93 million the previous year, with net income falling to A$8.02 million from A$47.81 million. Despite this dip, they provided optimistic full-year sales guidance of A$340-370 million for 2024 and showcased promising Phase 2 trial results for Angelman syndrome in August 2024. Insider confidence is evident with recent share purchases by key executives throughout July and August 2024, indicating potential future growth prospects despite current financial challenges.

• Click here and access our complete valuation analysis report to understand the dynamics of Neuren Pharmaceuticals.

• Assess Neuren Pharmaceuticals' past performance with our detailed historical performance reports.

Westgold Resources (ASX:WGX)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Westgold Resources is an Australian gold mining company with operations primarily in the Bryah and Murchison regions, boasting a market cap of approximately A$1.10 billion.

Operations: Westgold Resources generates revenue primarily from its Bryah and Murchison segments, with recent figures showing A$183.25 million and A$533.23 million respectively. The company's gross profit margin has shown significant fluctuation, reaching up to 21.91% as of June 2024, while its net income margin recently peaked at 13.29%.

PE: 27.8x

Westgold Resources, a small cap in Australia, recently made headlines with its addition to the S&P/ASX 200 Index and S&P/ASX 200 Materials Sector Index as of September 20, 2024. The company upped its production guidance for fiscal year 2025 to between 400,000 oz and 420,000 oz from the previous year's range of 220,000 oz to 235,000 oz. Notably, insider confidence is evident with significant share purchases over the past few months. Westgold's Beta Hunt mine continues to show promise with new high-grade gold discoveries at both Western Flanks and Fletcher Zone. The recent merger with Karora Resources has further strengthened its strategic position in the market.

• Take a closer look at Westgold Resources' potential here in our valuation report.

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

Taking Advantage

• Explore the 24 names from our Undervalued ASX Small Caps With Insider Buying screener here.
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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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