Exploring 3 Undervalued Small Caps With Insider Action On TSX In Canada

The Canadian market has shown resilience, buoyed by easing monetary policies and solid domestic economic fundamentals, as evidenced by recent GDP and inflation data. With financials and materials sectors performing strongly, small-cap stocks on the TSX are gaining attention for their potential value in this supportive environment. Identifying promising small-cap opportunities often involves looking at factors like insider activity alongside broader market trends, which can provide insights into a company's future prospects.

Top 10 Undervalued Small Caps With Insider Buying In Canada

Name	PE	PS	Discount to Fair Value	Value Rating
Sagicor Financial	1.2x	0.3x	32.90%	★★★★★★
Calfrac Well Services	11.9x	0.2x	34.91%	★★★★★☆
Nexus Industrial REIT	13.0x	3.2x	25.75%	★★★★★☆
Vermilion Energy	NA	1.2x	19.56%	★★★★★☆
Trican Well Service	8.4x	1.0x	13.49%	★★★★☆☆
Primaris Real Estate Investment Trust	13.2x	3.5x	44.05%	★★★★☆☆
Coveo Solutions	NA	3.9x	34.60%	★★★★☆☆
Hemisphere Energy	6.2x	2.3x	-116.49%	★★★☆☆☆
First National Financial	14.6x	4.1x	38.62%	★★★☆☆☆
European Residential Real Estate Investment Trust	NA	2.4x	-211.90%	★★★☆☆☆

Click here to see the full list of 22 stocks from our Undervalued TSX Small Caps With Insider Buying screener.

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

High Liner Foods (TSX:HLF)

Simply Wall St Value Rating: ★★★★☆☆

Overview: High Liner Foods is a company involved in the manufacturing and marketing of prepared and packaged frozen seafood, with a market cap of C$0.47 billion.

Operations: The primary revenue stream is from the manufacturing and marketing of prepared and packaged frozen seafood, with recent quarterly revenues reaching approximately $961.31 million. The company has experienced fluctuations in gross profit margin, which was 22.36% in the most recent period. Operating expenses are a significant component of costs, with general and administrative expenses consistently forming a large part of these expenditures.

PE: 5.4x

High Liner Foods, a Canadian company with a smaller market capitalization, recently reported third-quarter earnings showing sales of US$228.88 million and net income rising to US$18.35 million from US$5.49 million the previous year. This financial improvement is coupled with insider confidence, as insiders have been purchasing shares over recent months. The company also increased its quarterly dividend to C$0.17 per share and expanded its buyback plan by 943,340 shares, demonstrating management's confidence in future prospects despite reliance on external borrowing for funding.

• Click to explore a detailed breakdown of our findings in High Liner Foods' valuation report.

• Review our historical performance report to gain insights into High Liner Foods''s past performance.

Flagship Communities Real Estate Investment Trust (TSX:MHC.UN)

Simply Wall St Value Rating: ★★★★★☆

Overview: Flagship Communities Real Estate Investment Trust operates in the residential real estate sector, focusing on manufactured housing communities, with a market cap of approximately $0.52 billion.

Operations: Flagship Communities Real Estate Investment Trust generates revenue primarily from its residential real estate investments, reaching $83.14 million in recent periods. The company's gross profit margin has shown a stable pattern, with the latest figure at 66.08%. Operating expenses and general & administrative costs are significant components of its expenditure structure.

PE: 4.0x

Flagship Communities Real Estate Investment Trust, a smaller player in the Canadian market, recently announced a cash distribution of US$0.0517 per unit for November 2024, reflecting an annualized rate of US$0.62. Despite facing challenges with earnings coverage for interest payments and shareholder dilution over the past year, revenue has shown growth potential with a forecasted increase of 9% annually. Leadership changes include new board members bringing extensive industry experience to bolster strategic initiatives.

• Get an in-depth perspective on Flagship Communities Real Estate Investment Trust's performance by reading our valuation report here.

• Understand Flagship Communities Real Estate Investment Trust's track record by examining our Past report.

Vermilion Energy (TSX:VET)

Simply Wall St Value Rating: ★★★★★☆

Overview: Vermilion Energy is an oil and gas exploration and production company with a market cap of CA$3.87 billion.

Operations: Vermilion Energy's primary revenue stream is from its oil and gas exploration and production activities, generating CA$1.82 billion in the latest period. The company has experienced fluctuations in its net income margin, with recent figures showing a decline to -45.77%. Operating expenses have been significant, contributing to the variability in financial performance over time.

PE: -2.7x

Vermilion Energy, a Canadian energy firm, is gaining attention in the undervalued stock category. Despite a dip in third-quarter revenue to C$461.82 million from C$494.58 million last year, the company shows promise with earnings expected to grow 90% annually. Insider confidence is evident as they have been buying shares recently, indicating potential value recognition within the company. Vermilion's strategic projects in Germany and Croatia signal future growth prospects while recent share repurchases of 3.2 million shares for C$46 million underscore management's commitment to enhancing shareholder value amidst external funding challenges.

• Delve into the full analysis valuation report here for a deeper understanding of Vermilion Energy.

• Explore historical data to track Vermilion Energy's performance over time in our Past section.

Where To Now?

• Access the full spectrum of 22 Undervalued TSX Small Caps With Insider Buying 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.
• Maximize your investment potential with Simply Wall St, the comprehensive app that offers global market insights for free.

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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