Discovering Hidden Canadian Stock Gems In August 2024

As markets eagerly await potential rate cuts following the U.S. Federal Reserve's symposium in Jackson Hole, Canadian small-cap stocks have been navigating a landscape of cautious optimism. In this climate, identifying promising investments requires a keen eye for companies with strong fundamentals and growth potential despite broader market uncertainties.

Top 10 Undiscovered Gems With Strong Fundamentals In Canada

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
TWC Enterprises	6.74%	10.99%	25.68%	★★★★★★
Jaguar Mining	1.19%	5.49%	5.12%	★★★★★★
Taiga Building Products	NA	6.05%	10.50%	★★★★★★
Tornado Global Hydrovacs	14.62%	24.52%	64.90%	★★★★★☆
Reconnaissance Energy Africa	NA	31.73%	-6.92%	★★★★★☆
Mako Mining	22.90%	38.12%	54.79%	★★★★★☆
Firan Technology Group	17.91%	3.75%	23.32%	★★★★★☆
Pizza Pizza Royalty	15.66%	3.64%	3.95%	★★★★☆☆
Queen's Road Capital Investment	7.20%	22.14%	22.20%	★★★★☆☆
Genesis Land Development	53.32%	25.58%	47.05%	★★★★☆☆

Click here to see the full list of 45 stocks from our TSX Undiscovered Gems With Strong Fundamentals screener.

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

Hammond Power Solutions (TSX:HPS.A)

Simply Wall St Value Rating: ★★★★★★

Overview: Hammond Power Solutions Inc., along with its subsidiaries, designs, manufactures, and sells various transformers in Canada, the United States, Mexico, and India with a market cap of CA$1.36 billion.

Operations: Hammond Power Solutions generates CA$754.37 million in revenue from the manufacture and sale of transformers across multiple regions, including Canada, the United States, Mexico, and India. The company's market cap stands at CA$1.36 billion.

Hammond Power Solutions has seen its debt to equity ratio drop from 27.7% to 5% over five years, suggesting strong financial management. Recent earnings for Q2 2024 showed CAD 197.21 million in sales and CAD 23.59 million in net income, up from CAD 172.45 million and CAD 13.33 million respectively a year ago. Trading at nearly half its estimated fair value, the company’s EBIT covers interest payments by a whopping 87 times, reflecting robust profitability and growth potential within the electrical industry.

• Click here to discover the nuances of Hammond Power Solutions with our detailed analytical health report.

• Learn about Hammond Power Solutions' historical performance.

Leon's Furniture (TSX:LNF)

Simply Wall St Value Rating: ★★★★★★

Overview: Leon's Furniture Limited, together with its subsidiaries, operates as a retailer of home furnishings, mattresses, appliances, and electronics in Canada with a market cap of CA$2.06 billion.

Operations: Leon’s generates revenue of CA$2.53 billion from the sale of home furnishings, mattresses, appliances, and electronics. The company has a market cap of CA$2.06 billion.

Leon's Furniture, a notable small cap in Canada, has been showing solid performance. Recent earnings for Q2 2024 hit CAD 617.66 million, up from CAD 593.84 million the previous year, while net income rose to CAD 30.17 million from CAD 27.42 million. The company also announced a dividend increase to $0.20 per share and repurchased shares in the past year, reflecting confidence in its value proposition. Leon's debt-to-equity ratio improved significantly over five years from 20.4% to 10.4%.

• Click to explore a detailed breakdown of our findings in Leon's Furniture's health report.

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

TerraVest Industries (TSX:TVK)

Simply Wall St Value Rating: ★★★★★☆

Overview: TerraVest Industries Inc. manufactures and sells goods and services to energy, agriculture, mining, transportation, and other markets in Canada and the United States with a market cap of CA$1.85 billion.

Operations: TerraVest Industries generates revenue primarily from HVAC and Containment Equipment (CA$292.90 million), Compressed Gas Equipment (CA$243.77 million), Service (CA$201.78 million), and Processing Equipment (CA$117.58 million).

TerraVest Industries, a small-cap player in the Canadian market, has shown impressive performance with earnings growing 43.6% over the past year, outpacing the Energy Services industry. The company’s net debt to equity ratio has improved from 117.9% to 49.4% over five years, though it remains high at 42.3%. TerraVest recently reported CAD 238.13 million in Q3 revenue and CAD 11.92 million in net income, with basic EPS of CAD 0.63 compared to CAD 0.45 last year.

• Dive into the specifics of TerraVest Industries here with our thorough health report.

• Evaluate TerraVest Industries' historical performance by accessing our past performance report.

Key Takeaways

• Access the full spectrum of 45 TSX Undiscovered Gems With Strong Fundamentals by clicking on this link.
• Invested in any of these stocks? Simplify your portfolio management with Simply Wall St and stay ahead with our alerts for any critical updates on your stocks.
• Unlock the power of informed investing with Simply Wall St, your free guide to navigating stock markets worldwide.

Want To Explore Some Alternatives?

• 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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