Top Undervalued Small Caps With Insider Buying On TSX In January 2025

As the Canadian market navigates the early days of 2025, investors are grappling with fluctuating bond yields and their impact on stock valuations, particularly in the small-cap sector. With interest rates stabilizing and economic fundamentals showing resilience, identifying stocks that demonstrate strong earnings potential and insider confidence can be crucial for those looking to capitalize on opportunities within this dynamic environment.

Top 10 Undervalued Small Caps With Insider Buying In Canada

Name	PE	PS	Discount to Fair Value	Value Rating
Primaris Real Estate Investment Trust	11.9x	3.2x	46.03%	★★★★★★
First National Financial	13.7x	3.9x	45.43%	★★★★★☆
Nexus Industrial REIT	12.3x	3.1x	27.72%	★★★★★☆
Bragg Gaming Group	NA	1.1x	-80.50%	★★★★☆☆
Minto Apartment Real Estate Investment Trust	NA	5.4x	21.30%	★★★★☆☆
Savaria	30.9x	1.6x	27.68%	★★★☆☆☆
Hemisphere Energy	6.0x	2.3x	-112.52%	★★★☆☆☆
Parex Resources	3.8x	0.9x	-11.51%	★★★☆☆☆
Calfrac Well Services	12.1x	0.2x	47.68%	★★★☆☆☆
Saturn Oil & Gas	2.2x	0.6x	-88.06%	★★★☆☆☆

Click here to see the full list of 30 stocks from our Undervalued TSX Small Caps With Insider Buying screener.

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

Badger Infrastructure Solutions (TSX:BDGI)

Simply Wall St Value Rating: ★★★★★★

Overview: Badger Infrastructure Solutions specializes in providing non-destructive excavating services, with a focus on safely exposing underground infrastructure, and has a market cap of approximately $1.09 billion CAD.

Operations: Badger Infrastructure Solutions generates revenue primarily from its Non-Destructive Excavating Services, with a recent gross profit margin of 28.47%. The company has experienced fluctuations in net income margins, which were last recorded at 5.71%, reflecting the impact of cost of goods sold and operating expenses on profitability.

PE: 21.6x

Badger Infrastructure Solutions, a Canadian small-cap company, is gaining attention for its potential value. Despite a high debt level due to external borrowing, the company's earnings are projected to grow at 37.82% annually. Recent insider confidence is evident with share repurchases totaling C$1.64 million between July and September 2024. Additionally, the appointment of George Williams to the board brings seasoned leadership expertise from the utility sector, potentially bolstering strategic direction and governance as Badger navigates future growth opportunities.

• Unlock comprehensive insights into our analysis of Badger Infrastructure Solutions stock in this valuation report.

• Gain insights into Badger Infrastructure Solutions' historical performance by reviewing our past performance report.

Exchange Income (TSX:EIF)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Exchange Income is a diversified company operating primarily in the aerospace, aviation, and manufacturing sectors with a market capitalization of CA$2.25 billion.

Operations: The company generates revenue primarily from its Aerospace & Aviation segment, contributing CA$1.61 billion, and its Manufacturing segment, contributing CA$1.01 billion. The gross profit margin has shown fluctuations over the periods observed, reaching 35.72% in the latest quarter ending September 2024.

PE: 21.6x

Exchange Income Corporation, a Canadian company with a focus on aviation and manufacturing sectors, shows potential as an undervalued stock. Despite relying solely on external borrowing for funding, they maintain consistent dividend payouts of C$0.22 per share monthly, reflecting steady cash flow management. Recent earnings reports show growth in sales from C$414 million to C$433 million for the third quarter of 2024. Insider confidence is evident with recent purchases in December 2024, suggesting optimism about future performance amid forecasted earnings growth of 26% annually.

• Delve into the full analysis valuation report here for a deeper understanding of Exchange Income.

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

Saturn Oil & Gas (TSX:SOIL)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Saturn Oil & Gas is a Canadian company focused on the acquisition and exploration of resource properties, with a market capitalization of CA$0.29 billion.

Operations: Saturn Oil & Gas generates revenue primarily from the acquisition and exploration of resource properties, with recent figures reaching CA$731.85 million. The company's gross profit margin has varied, recently recorded at 69.14%. Operating expenses have been substantial, with notable costs in general and administrative expenses amounting to CA$39.87 million in the latest period. Non-operating expenses also significantly impact financial performance, as seen with a recent figure of CA$138.24 million affecting net income outcomes.

PE: 2.2x

Saturn Oil & Gas, a Canadian company, shows potential in the undervalued stock space despite challenges. It has faced substantial shareholder dilution recently and relies heavily on external borrowing for funding. However, insider confidence is evident with Thomas Claugus purchasing 308,300 shares worth C$693,675 in 2024. The company reported significant revenue growth to C$295.5 million in Q3 2024 from negative figures a year ago and expects production to reach up to 40,000 boe/d in 2025.

• Dive into the specifics of Saturn Oil & Gas here with our thorough valuation report.

• Assess Saturn Oil & Gas' past performance with our detailed historical performance reports.

Turning Ideas Into Actions

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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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