Exploring ASX's Undervalued Small Caps With Insider Action In December 2024

As the Australian market wraps up the year, the ASX 200 has shown resilience with a modest gain of 0.29%, even as inflation concerns linger following the Reserve Bank of Australia's decision to keep interest rates unchanged. Amidst this backdrop, small-cap stocks continue to capture interest, particularly those demonstrating potential value and insider activity—a combination that can signal confidence in a company's prospects despite broader economic uncertainties.

Top 10 Undervalued Small Caps With Insider Buying In Australia

Name	PE	PS	Discount to Fair Value	Value Rating
Infomedia	43.3x	3.9x	33.86%	★★★★★★
Rural Funds Group	8.3x	6.1x	36.33%	★★★★★★
Collins Foods	15.6x	0.6x	13.37%	★★★★★☆
SHAPE Australia	14.8x	0.3x	29.66%	★★★★☆☆
Dicker Data	19.0x	0.7x	-58.48%	★★★★☆☆
Autosports Group	5.8x	0.1x	-53.76%	★★★★☆☆
Healius	NA	0.6x	10.58%	★★★★☆☆
Tabcorp Holdings	NA	0.6x	3.24%	★★★★☆☆
Corporate Travel Management	22.2x	2.6x	45.75%	★★★☆☆☆
BSP Financial Group	7.8x	2.8x	0.29%	★★★☆☆☆

Click here to see the full list of 23 stocks from our Undervalued ASX Small Caps With Insider Buying screener.

Here's a peek at a few of the choices from the screener.

Abacus Storage King (ASX:ASK)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Abacus Storage King operates in the self-storage industry, focusing on rental and merchandising services, with a market capitalization of A$1.25 billion.

Operations: ASK generates revenue primarily from rental and merchandising activities, with a recent gross profit margin of 80.50%. The company experienced fluctuations in net income margin, reaching as high as 62.67% and as low as 5.81% over the reported periods. Operating expenses have shown an upward trend, impacting overall profitability alongside significant non-operating expenses.

PE: 11.3x

Abacus Storage King, a player in the self-storage industry, has caught attention for its small cap nature and perceived value. Despite facing a forecasted 1.7% annual decline in earnings over the next three years, revenue is expected to grow by 7.42% annually. Insider confidence is evident with recent share purchases from January to September 2024. The company relies on external borrowing for funding, which adds risk but also potential upside as they navigate growth opportunities in a competitive market.

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

• Review our historical performance report to gain insights into Abacus Storage King's's past performance.

Collins Foods (ASX:CKF)

Simply Wall St Value Rating: ★★★★★☆

Overview: Collins Foods operates a network of fast-food restaurants, including Taco Bell in Australia and KFC in both Europe and Australia, with a market capitalization of A$1.69 billion.

Operations: Collins Foods generates revenue primarily from its KFC Restaurants in Australia and Europe, with significant contributions from Taco Bell in Australia. The company's gross profit margin has seen fluctuations, reaching 50.44% recently. Operating expenses are a major cost component, with sales and marketing as well as general and administrative expenses being substantial contributors.

PE: 15.6x

Collins Foods, an Australian company with a small market footprint, is expanding its restaurant portfolio by adding seven new locations in fiscal 2025. Despite a dip in net income to A$24.12 million for the half-year ending October 2024 from A$50.45 million previously, the company's leadership change with Xavier Simonet as CEO may drive strategic growth. Insiders have shown confidence through recent share purchases, reflecting potential value recognition amidst evolving business dynamics and expansion efforts in Australia and Europe.

• Get an in-depth perspective on Collins Foods' performance by reading our valuation report here.

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

Rural Funds Group (ASX:RFF)

Simply Wall St Value Rating: ★★★★★★

Overview: Rural Funds Group is an Australian agricultural real estate investment trust that focuses on leasing properties for cattle, almonds, cropping, vineyards, macadamias, and other agricultural activities with a market capitalization of A$1.03 billion.

Operations: Rural Funds Group generates revenue primarily from cattle, almonds, and macadamias. The company's gross profit margin has shown a declining trend from 88.96% in March 2015 to 69.37% in June 2024. Operating expenses have increased over time, impacting overall profitability.

PE: 8.3x

Rural Funds Group, a player in Australia's agricultural sector, exhibits characteristics of an undervalued stock. Despite challenges like declining earnings forecasts and interest payments not well-covered by earnings, insider confidence is evident with recent share purchases throughout 2024. The company faces risks from its sole reliance on external borrowing for funding. Profit margins have slipped to 74% over the past year. However, dividend affirmations indicate commitment to shareholder returns with A$0.029 per unit announced for December 2024.

• Click here and access our complete valuation analysis report to understand the dynamics of Rural Funds Group.

• Gain insights into Rural Funds Group's past trends and performance with our Past report.

Taking Advantage

• Unlock our comprehensive list of 23 Undervalued ASX Small Caps With Insider Buying by clicking here.
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Ready For A Different Approach?

• 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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