August 2024's Top Undervalued Small Caps With Insider Buying In Australia

The Australian market has recently seen mixed performance, with the ASX200 closing slightly down by 0.04% at 8,024 points. While sectors like Telecommunications and Health Care have shown resilience, Utilities and Energy experienced notable declines. In this context of fluctuating market sentiment, identifying undervalued small-cap stocks with insider buying can offer unique opportunities for investors seeking growth potential amidst economic uncertainties.

Top 10 Undervalued Small Caps With Insider Buying In Australia

Name	PE	PS	Discount to Fair Value	Value Rating
Servcorp	12.2x	1.5x	13.58%	★★★★☆☆
Elders	23.0x	0.5x	48.98%	★★★★☆☆
Eagers Automotive	10.2x	0.3x	40.01%	★★★★☆☆
Growthpoint Properties Australia	NA	5.4x	30.54%	★★★★☆☆
Codan	33.1x	4.9x	16.35%	★★★☆☆☆
Coventry Group	235.7x	0.4x	-16.09%	★★★☆☆☆
oOh!media	20.4x	1.1x	-26.18%	★★★☆☆☆
Neuren Pharmaceuticals	12.6x	8.6x	-49.80%	★★★☆☆☆
Kelsian Group	45.6x	0.8x	29.55%	★★★☆☆☆
Credit Corp Group	21.1x	2.8x	40.04%	★★★☆☆☆

Click here to see the full list of 16 stocks from our Undervalued ASX Small Caps With Insider Buying screener.

Here we highlight a subset of our preferred stocks from the screener.

Codan (ASX:CDA)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Codan is a technology company specializing in communications and metal detection solutions, with a market cap of A$1.54 billion.

Operations: The company generates revenue primarily from its Communications and Metal Detection segments, with total revenue reaching A$550.46 million as of June 30, 2024. The net income margin has shown a downward trend, hitting 14.79% in the same period.

PE: 33.1x

Codan, a small-cap Australian company, reported impressive annual sales of A$550.46 million for the year ending June 30, 2024, up from A$456.5 million the previous year. Net income rose to A$81.39 million from A$67.7 million, reflecting strong growth in earnings per share to A$0.45 from A$0.375 previously. Insider confidence is evident with recent significant share purchases by executives over the past six months, indicating belief in future prospects despite reliance on external borrowing for funding.

• Navigate through the intricacies of Codan with our comprehensive valuation report here.

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

Cedar Woods Properties (ASX:CWP)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Cedar Woods Properties is a property development and investment company with operations primarily focused on residential, commercial, and retail projects, holding a market cap of approximately A$0.36 billion.

Operations: The company's primary revenue stream is derived from property development and investment, with recent revenue reported at A$386.30 million. The gross profit margin has shown variability, reaching 46.68% in June 2016 and 19.27% in December 2023, reflecting fluctuations in cost of goods sold (COGS). Operating expenses have also varied over the periods, impacting net income margins which have ranged from a high of 29.29% in December 2015 to a low of 6.96% in December 2023.

PE: 11.3x

Cedar Woods Properties, an Australian small-cap, has shown promising signs of being undervalued. The company's earnings are projected to grow at 12.56% annually. On August 20, they announced a final fully franked dividend of A$0.17 per share for the six months ending June 30, 2024, with payment due on October 25. Insider confidence is evident with recent insider purchases adding credibility to its potential growth trajectory despite higher-risk external borrowing as its sole funding source.

• Unlock comprehensive insights into our analysis of Cedar Woods Properties stock in this valuation report.

• Explore historical data to track Cedar Woods Properties' performance over time in our Past section.

Servcorp (ASX:SRV)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Servcorp is a provider of serviced office solutions, virtual offices, and coworking spaces with a market cap of approximately A$0.36 billion.

Operations: Servcorp generates revenue primarily from real estate rentals, with a recent gross profit margin of 63.74%. Operating expenses include significant allocations to sales and marketing, general and administrative costs, and non-operating expenses.

PE: 12.2x

Servcorp, an Australian small cap, reported a strong financial performance for the year ending June 30, 2024. Sales increased to A$314.11 million from A$292.47 million the previous year, and net income surged to A$39.04 million from A$11.07 million. Basic earnings per share rose significantly to A$0.399 from A$0.114 last year, reflecting solid growth in profitability and revenue streams despite reliance on external borrowing for funding. Insider confidence was evident with recent share purchases by executives throughout the past six months, indicating their belief in the company's future potential.

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

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

Summing It All Up

• Access the full spectrum of 16 Undervalued ASX Small Caps With Insider Buying by clicking on this link.
• Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments.
• Join a community of smart investors by using Simply Wall St. It's free and delivers expert-level analysis on worldwide markets.

Seeking Other Investments?

• 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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