Exploring Australia's Small-Cap Market Opportunities

February 25, 2025 01:31 AM AEDT | By Team Kalkine Media
 Exploring Australia's Small-Cap Market Opportunities
Image source: Shutterstock

Highlights

  • ASX hovers above 8,300 points amid risk-off sentiment
  • Identifying small-cap stocks with resilience and growth potential
  • Spotlight on Cobram Estate Olives, Diversified United Investment, and Southern Cross Electrical Engineering

The Australian market is currently navigating a challenging earnings season, with the ASX settling just above 8,300 points. Investors are notably cautious, leading to a 'risk-off' sentiment that impacts sectors like IT and real estate. Amidst this, identifying small-cap stocks that show resilience and promise for growth is essential.

Cobram Estate Olives (ASX:CBO)

Cobram Estate Olives Limited is active in the production and marketing of olive oil across several countries, with a market cap of A$837.89 million.

The company derives its income mainly from olive oil production and marketing. A reported net loss of A$4.46 million marked improvement from prior figures, alongside A$124.77 million in sales, suggesting strong growth despite hurdles. Trading significantly below fair value implies potential undervaluation, with forecasts predicting a 14.56% annual earnings growth.

Diversified United Investment (ASX:DUI)

As a publicly owned investment manager, Diversified United Investment boasts a market capitalization of A$1.16 billion.

This company relies heavily on its investment management activities for revenue. Despite facing a negative earnings growth, its financial situation remains stable with high-quality earnings and strong interest coverage. The company shows steady net income growth, presenting a stable outlook for future earnings.

Southern Cross Electrical Engineering (ASX:SXE)

Specializing in electrical and maintenance services, Southern Cross Electrical Engineering serves various sectors and holds a market cap of A$474.36 million.

The company exhibits a strong financial health with no outstanding debt. With a significant sales increase and robust net income growth, Southern Cross is set for potential future upside. A recent dividend increase further enhances its attractiveness to investors.


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