Three Top Undervalued Small Caps In Canada With Insider Action

The market has been flat in the last week but is up 13% over the past year, with earnings forecast to grow by 16% annually. In this environment, identifying undervalued small-cap stocks with notable insider action can present compelling opportunities for investors.

Top 10 Undervalued Small Caps With Insider Buying In Canada

Name	PE	PS	Discount to Fair Value	Value Rating
Calfrac Well Services	2.6x	0.2x	35.45%	★★★★★★
Nexus Industrial REIT	3.6x	3.5x	24.75%	★★★★★☆
Obsidian Energy	6.7x	1.1x	47.91%	★★★★★☆
Bragg Gaming Group	NA	1.1x	18.25%	★★★★★☆
Trican Well Service	8.1x	1.0x	6.03%	★★★★☆☆
Hemisphere Energy	6.1x	2.3x	7.79%	★★★★☆☆
Information Services	23.6x	2.1x	-64.93%	★★★★☆☆
Sagicor Financial	1.3x	0.3x	-42.17%	★★★★☆☆
Primaris Real Estate Investment Trust	11.6x	3.1x	42.61%	★★★★☆☆
VersaBank	9.9x	4.0x	-12.78%	★★★☆☆☆

Click here to see the full list of 26 stocks from our Undervalued TSX Small Caps With Insider Buying screener.

Let's dive into some prime choices out of from the screener.

NorthWest Healthcare Properties Real Estate Investment Trust (TSX:NWH.UN)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: NorthWest Healthcare Properties Real Estate Investment Trust operates in the healthcare real estate industry, managing a portfolio of medical office buildings, clinics, and hospitals with a market cap of approximately CA$2.75 billion.

Operations: NorthWest Healthcare Properties Real Estate Investment Trust generates revenue primarily from the healthcare real estate industry, amounting to CA$523.85 million. The company has experienced fluctuations in its net income margin, with recent periods showing negative margins such as -0.75289% for the quarter ending June 30, 2024. Gross profit margin has varied over time, reaching up to 82.39% during the quarter ending September 30, 2021. Operating expenses and non-operating expenses have also significantly impacted overall profitability in recent quarters.

PE: -3.3x

NorthWest Healthcare Properties Real Estate Investment Trust, a small cap in Canada, recently declared a monthly distribution of C$0.03 per unit for August 2024. Despite reporting a net loss of C$122 million for Q2 2024, insider confidence is evident with Peter Aghar purchasing 100,000 shares worth approximately C$478K. The company faces challenges with earnings not covering interest payments but shows potential with forecasted earnings growth of over 105% annually.

• Dive into the specifics of NorthWest Healthcare Properties Real Estate Investment Trust here with our thorough valuation report.

• Assess NorthWest Healthcare Properties Real Estate Investment Trust's past performance with our detailed historical performance reports.

Nexus Industrial REIT (TSX:NXR.UN)

Simply Wall St Value Rating: ★★★★★☆

Overview: Nexus Industrial REIT operates as a real estate investment trust focusing on the acquisition and management of industrial properties, with a market cap of approximately CA$1.05 billion.

Operations: Nexus Industrial REIT generates revenue primarily from investment properties, with recent quarterly revenue reaching CA$167.21 million. The company reported a gross profit margin of 71.56% and a net income margin of 99.45%.

PE: 3.6x

Nexus Industrial REIT, a small cap stock in Canada, has shown mixed financial results. For Q2 2024, sales rose to C$43.91 million from C$38.42 million a year ago, while net income dropped to C$43.53 million from C$77.22 million. Over six months, sales increased to C$85.51 million with net income at C$87.2 million compared to last year's figures of C$75.9 and C$80.94 million respectively. Insider confidence is evident with recent share purchases by executives throughout 2024, indicating their belief in the company's potential despite forecasts of declining earnings over the next three years due to large one-off items impacting results and reliance on external borrowing for funding.

• Click here to discover the nuances of Nexus Industrial REIT with our detailed analytical valuation report.

• Gain insights into Nexus Industrial REIT's past trends and performance with our Past report.

VersaBank (TSX:VBNK)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: VersaBank operates as a digital bank providing banking and financial technology services, with a market cap of approximately CA$0.35 billion.

Operations: VersaBank generates revenue primarily from its Digital Banking segment, contributing CA$104.90 million, and DRTC, which adds CA$10.56 million. The company has seen its net income margin fluctuate over the years, reaching 40.54% as of April 30, 2024. Operating expenses have shown variability but were recorded at CA$49.53 million in the same period.

PE: 9.9x

VersaBank, a Canadian small-cap bank, has shown promising growth with net income rising to C$11.83 million in Q2 2024 from C$10.26 million a year ago. Basic earnings per share increased to C$0.45 from C$0.38 over the same period. They are expanding into the U.S., appointing four senior executives for their new subsidiary, VersaBank USA, pending final approval on August 30, 2024. Recent insider confidence is evident as they purchased shares within the last six months, suggesting positive future prospects despite current undervaluation.

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

• Gain insights into VersaBank's historical performance by reviewing our past performance report.

Where To Now?

• Gain an insight into the universe of 26 Undervalued TSX Small Caps With Insider Buying by clicking here.
• Are you invested in these stocks already? Keep abreast of every twist and turn by setting up a portfolio with Simply Wall St, where we make it simple for investors like you to stay informed and proactive.
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Interested In Other Possibilities?

• 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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