Top 3 Undervalued Small Caps With Insider Buys To Watch In August 2024

The Australian market has climbed 1.1% in the last 7 days and is up 11% over the last 12 months, with earnings forecast to grow by 13% annually. In this thriving environment, 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
Corporate Travel Management	19.9x	2.4x	6.69%	★★★★★☆
Dicker Data	22.2x	0.8x	10.12%	★★★★☆☆
Elders	22.7x	0.5x	49.48%	★★★★☆☆
Lycopodium	9.3x	1.4x	24.78%	★★★★☆☆
Neuren Pharmaceuticals	16.7x	10.1x	-8.11%	★★★★☆☆
Eagers Automotive	10.0x	0.2x	40.90%	★★★★☆☆
Credit Corp Group	20.0x	2.7x	42.56%	★★★★☆☆
Codan	33.4x	4.9x	15.89%	★★★☆☆☆
Coventry Group	244.6x	0.4x	-19.28%	★★★☆☆☆
Abacus Group	NA	5.6x	29.57%	★★★☆☆☆

Click here to see the full list of 19 stocks from our Undervalued ASX Small Caps With Insider Buying screener.

Below we spotlight a couple of our favorites from our exclusive screener.

Abacus Group (ASX:ABG)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Abacus Group is a diversified property investment and management company with operations primarily in commercial real estate, boasting a market cap of approximately A$2.50 billion.

Operations: The company generates revenue primarily from its commercial segment, with recent figures showing A$192.35 million. Its gross profit margin has varied, reaching as high as 77.34% in the latest period ending June 30, 2024. Operating expenses and non-operating expenses have significantly impacted net income, leading to a net loss of A$241.99 million for the same period.

PE: -4.5x

Abacus Group, a smaller Australian investment option, recently reported a net loss of A$241.04 million for the fiscal year ending June 30, 2024, compared to a net income of A$25.5 million the previous year. Despite this setback, insider confidence is evident with notable share purchases over the past six months. Sales slightly dipped to A$144.37 million from A$147.08 million last year. Interest payments remain poorly covered by earnings; however, earnings are forecasted to grow 56% annually moving forward.

• Get an in-depth perspective on Abacus Group's performance by reading our valuation report here.

• Examine Abacus Group's past performance report to understand how it has performed in the past.

Codan (ASX:CDA)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Codan is a technology company specializing in communications and metal detection products, with a market cap of A$1.19 billion.

Operations: Codan generates revenue primarily from its Communications and Metal Detection segments, with the former contributing A$326.91 million and the latter A$219.85 million. The company's gross profit margin has shown variability, peaking at 60.25% in June 2017 and declining to 54.42% by December 2023. Operating expenses have increased over time, reaching A$190.78 million in June 2024, driven mainly by sales & marketing and R&D expenditures.

PE: 33.4x

Codan, an Australian small-cap, recently reported a full-year sales increase to A$550.46 million from A$456.5 million and net income rising to A$81.39 million from A$67.7 million the previous year. Basic earnings per share grew to A$0.45 from A$0.375, reflecting strong financial performance despite higher risk funding sources through external borrowing only. Insider confidence was demonstrated by significant share purchases over the last six months, suggesting potential growth prospects for this undervalued stock in the tech sector.

• Click to explore a detailed breakdown of our findings in Codan's valuation report.

• Understand Codan's track record by examining our Past report.

Servcorp (ASX:SRV)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Servcorp operates in the real estate rental sector, providing serviced office spaces and virtual office solutions, with a market cap of A$0.45 billion.

Operations: Servcorp generates revenue primarily from real estate rental services, with recent figures showing A$314.89 million. The company's gross profit margin has varied, reaching 63.74% in the latest period ending June 30, 2024. Notably, net income margin fluctuated significantly over the periods observed, peaking at 12.40% in some quarters while dipping to as low as -1.67%.

PE: 12.5x

Servcorp, an Australian small cap, recently declared a final dividend of A$0.13 per share for the year ending June 30, 2024, up from A$0.12 last year. Full-year revenue reached A$317 million with net income soaring to A$39 million from A$11 million in the previous period. Insider confidence is evident with significant insider purchases throughout the past year. The company projects underlying NPBIT between A$61-A$65 million for fiscal 2025, reflecting a minimum 8% increase from fiscal 2024's results.

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

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

Make It Happen

• Unlock our comprehensive list of 19 Undervalued ASX Small Caps With Insider Buying by clicking here.
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Seeking Other Investments?

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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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