AutoCanada And 2 Other Undervalued Small Caps With Insider Buying In Canada

The recent rate cut by the Federal Reserve, alongside similar moves by the Bank of Canada, has created a more favorable environment for small-cap stocks in Canada. In this context, identifying undervalued small caps with insider buying can offer promising opportunities for investors looking to capitalize on market shifts.

Top 10 Undervalued Small Caps With Insider Buying In Canada

Name	PE	PS	Discount to Fair Value	Value Rating
Vermilion Energy	NA	1.1x	47.93%	★★★★★★
Trican Well Service	7.8x	1.0x	12.17%	★★★★★☆
Nexus Industrial REIT	3.8x	3.8x	20.18%	★★★★★☆
Flagship Communities Real Estate Investment Trust	3.6x	3.8x	46.00%	★★★★★☆
AutoCanada	NA	0.1x	46.88%	★★★★★☆
Rogers Sugar	15.8x	0.6x	46.90%	★★★★☆☆
Sagicor Financial	1.2x	0.3x	-33.16%	★★★★☆☆
Calfrac Well Services	2.5x	0.2x	-55.44%	★★★★☆☆
Primaris Real Estate Investment Trust	12.7x	3.4x	41.18%	★★★★☆☆
Hemisphere Energy	6.3x	2.4x	-227.48%	★★★☆☆☆

Click here to see the full list of 18 stocks from our Undervalued TSX Small Caps With Insider Buying screener.

Here we highlight a subset of our preferred stocks from the screener.

AutoCanada (TSX:ACQ)

Simply Wall St Value Rating: ★★★★★☆

Overview: AutoCanada operates a network of retail automobile dealerships across Canada, with a market cap of approximately CA$0.54 billion.

Operations: AutoCanada generates revenue primarily from its retail automobile dealerships, which amounted to CA$6.16 billion as of the latest period. The company’s cost of goods sold (COGS) was CA$5.14 billion, resulting in a gross profit margin of 16.66%.

PE: -10.6x

AutoCanada, a smaller Canadian company, recently completed strategic divestitures to enhance profitability and reduce leverage. Despite reporting a net loss of C$34.28 million for Q2 2024, the company forecasts earnings growth of 73.23% annually. Insider confidence is evident with Christopher Harris purchasing 7,500 shares valued at C$103,500 in recent months. Additionally, AutoCanada repurchased 452,345 shares for C$9.74 million between April and August 2024 to bolster shareholder value amidst challenging financial conditions.

• Take a closer look at AutoCanada's potential here in our valuation report.

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

Centerra Gold (TSX:CG)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Centerra Gold is a Canadian-based gold mining and exploration company with operations in Turkey, Canada, and the United States, and has a market cap of approximately $1.85 billion CAD.

Operations: Centerra Gold generates revenue from its Öksüt, Molybdenum, and Mount Milligan segments. The company's gross profit margin has shown variability, with a recent figure of 44.22% as of June 30, 2024. Operating expenses and non-operating expenses significantly impact net income margins, which have fluctuated over time.

PE: 12.6x

Centerra Gold, a smaller Canadian mining company, has recently shown insider confidence with significant share purchases. Between April and June 2024, the company repurchased 1.44 million shares for $9.8 million, contributing to a total of 3.59 million shares repurchased since November 2023 for $21.9 million. For Q2 2024, Centerra reported sales of $282 million and net income of $37.67 million compared to a loss last year, highlighting improved financial performance despite forecasted earnings decline over the next three years by an average of 9.8%.

• Delve into the full analysis valuation report here for a deeper understanding of Centerra Gold.

• Learn about Centerra Gold's historical performance.

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

Simply Wall St Value Rating: ★★★☆☆☆

Overview: NorthWest Healthcare Properties Real Estate Investment Trust operates a portfolio of healthcare real estate properties and has a market cap of approximately CA$2.63 billion.

Operations: The company generates revenue primarily from the healthcare real estate industry, with recent figures showing CA$523.85 million. Notably, gross profit margins have fluctuated over time, reaching as high as 94.83% and as low as 69.89%. Operating expenses and non-operating expenses significantly impact net income, leading to variable net income margins ranging from -75.29% to 86.50%.

PE: -3.6x

NorthWest Healthcare Properties Real Estate Investment Trust, with a focus on healthcare properties, shows potential as an undervalued stock in Canada. Despite recent financial challenges, including a net loss of C$122 million for Q2 2024 and declining sales, insider confidence is evident. Independent Trustee Peter Aghar bought 100,000 shares worth approximately C$478K recently. The REIT continues to provide steady dividends at C$0.03 per unit monthly, indicating resilience and commitment to shareholders even amid financial hurdles.

• Click to explore a detailed breakdown of our findings in NorthWest Healthcare Properties Real Estate Investment Trust's valuation report.

• Gain insights into NorthWest Healthcare Properties Real Estate Investment Trust's historical performance by reviewing our past performance report.

Seize The Opportunity

• Delve into our full catalog of 18 Undervalued TSX Small Caps With Insider Buying here.
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Contemplating Other Strategies?

• 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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