Top 3 Undervalued Small Caps With Insider Action In Australia August 2024

Over the last 7 days, the Australian market has dropped 3.7%, but it remains up 4.4% over the past year with earnings forecasted to grow by 13% annually. In this context, identifying undervalued small-cap stocks with insider action can present compelling opportunities for investors looking to capitalize on potential growth and market resilience.

Top 10 Undervalued Small Caps With Insider Buying In Australia

Name	PE	PS	Discount to Fair Value	Value Rating
DUG Technology	53.5x	3.7x	16.50%	★★★★★☆
RAM Essential Services Property Fund	NA	5.8x	45.56%	★★★★★☆
Healius	NA	0.6x	46.93%	★★★★★☆
Elders	22.6x	0.5x	49.87%	★★★★☆☆
Dicker Data	21.1x	0.8x	14.83%	★★★★☆☆
Eagers Automotive	9.2x	0.3x	42.94%	★★★★☆☆
Codan	29.1x	4.3x	35.52%	★★★★☆☆
Coventry Group	277.8x	0.4x	5.27%	★★★★☆☆
BSP Financial Group	8.5x	2.9x	3.45%	★★★☆☆☆
FINEOS Corporation Holdings	NA	2.6x	-753.94%	★★★☆☆☆

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

We'll examine a selection from our screener results.

Cedar Woods Properties (ASX:CWP)

Simply Wall St Value Rating: ★★★☆☆☆

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

Operations: Cedar Woods Properties generates revenue primarily through property development and investment, with a recent figure of A$362.23 million. The company's gross profit margin has shown variability, most recently at 19.27%. Operating expenses and non-operating expenses are significant cost components impacting net income, which was A$25.21 million in the latest period.

PE: 15.9x

Cedar Woods Properties, a prominent player among undervalued small caps in Australia, has shown insider confidence with share purchases over the past six months. Despite a dip in profit margins from 10.4% to 7%, the company remains in good financial standing with debt well-covered by operating cash flow. Cedar Woods relies on external borrowing for funding, which carries higher risk but is manageable given their strong earnings growth forecast of 20.04% annually.

• Click to explore a detailed breakdown of our findings in Cedar Woods Properties' valuation report.

• Examine Cedar Woods Properties' past performance report to understand how it has performed in the past.

FINEOS Corporation Holdings (ASX:FCL)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: FINEOS Corporation Holdings is a software company specializing in providing core systems for life, accident, and health insurance carriers with a market cap of approximately €1.15 billion.

Operations: FINEOS Corporation Holdings generates revenue primarily from its Software & Programming segment, amounting to €124.66 million. The company has experienced a gross profit margin of 70.81% as of the latest period, with significant operating expenses including R&D (€58.76 million) and General & Administrative (€17.65 million).

PE: -23.4x

FINEOS Corporation Holdings, a small-cap player in the insurance technology sector, recently announced that New Zealand's Accident Compensation Corporation will upgrade to its FINEOS Platform, enhancing service delivery for personal injury claims. On July 9, 2024, Shelby Coleman was appointed as Company Secretary. Earnings are projected to grow by 62.79% annually despite reliance on external borrowing for funding. Insider confidence is evident with recent share purchases by executives over the past six months.

• Unlock comprehensive insights into our analysis of FINEOS Corporation Holdings stock in this valuation report.

• Understand FINEOS Corporation Holdings' track record by examining our Past report.

MFF Capital Investments (ASX:MFF)

Simply Wall St Value Rating: ★★★★☆☆

Overview: MFF Capital Investments is an investment company that primarily focuses on equity investments, with a market cap of A$1.86 billion.

Operations: MFF Capital Investments generates revenue primarily from equity investments, reporting a net income of A$447.36 million on revenues of A$659.96 million for the period ending 2024-06-30. The company has consistently shown a gross profit margin of 100% across multiple periods, with operating expenses and non-operating expenses impacting its net income margins, which stood at 67.78% for the latest period.

PE: 4.9x

MFF Capital Investments, a small player in the Australian market, recently reported strong earnings for the year ending June 30, 2024. Revenue jumped to A$666.59 million from A$484.61 million last year, while net income rose to A$447.36 million from A$323.58 million. Basic earnings per share increased to A$0.7735 from A$0.5534 previously, indicating solid performance despite their reliance on external borrowing for funding needs rather than customer deposits or other lower-risk sources of capital.

• Navigate through the intricacies of MFF Capital Investments with our comprehensive valuation report here.

• Learn about MFF Capital Investments' historical performance.

Seize The Opportunity

• Unlock more gems! Our Undervalued ASX Small Caps With Insider Buying screener has unearthed 14 more companies for you to explore.Click here to unveil our expertly curated list of 17 Undervalued ASX Small Caps With Insider Buying.
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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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