Discover Canada's Top Undervalued Small Caps With Insider Buying In July 2024

Over the last 7 days, the Canadian market has remained flat, but it is up 10% over the past year with earnings expected to grow by 15% per annum over the next few years. In this favorable environment, identifying undervalued small-cap stocks with insider buying 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
Dundee Precious Metals	8.6x	2.9x	32.00%	★★★★★★
First National Financial	8.7x	3.0x	48.58%	★★★★★☆
Calfrac Well Services	2.3x	0.2x	28.14%	★★★★★☆
Primaris Real Estate Investment Trust	11.7x	3.0x	34.35%	★★★★★☆
Nexus Industrial REIT	2.8x	3.4x	14.10%	★★★★☆☆
Guardian Capital Group	10.4x	4.0x	31.27%	★★★★☆☆
Russel Metals	9.7x	0.5x	43.70%	★★★★☆☆
Bragg Gaming Group	NA	1.4x	21.80%	★★★★☆☆
Sagicor Financial	1.1x	0.3x	-73.20%	★★★★☆☆
AutoCanada	11.2x	0.1x	-96.70%	★★★☆☆☆

Click here to see the full list of 31 stocks from our Undervalued TSX Small Caps With Insider Buying screener.

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

Interfor (TSX:IFP)

Simply Wall St Value Rating: ★★★★★★

Overview: Interfor is a Canadian company primarily engaged in the production and sale of solid wood products, with operations spanning North America and a market cap of approximately CA$1.20 billion.

Operations: Interfor generates revenue primarily from its Solid Wood segment, with recent quarterly revenue reaching CA$3.30 billion. The company's gross profit margin has shown significant fluctuations, peaking at 47.49% and recently dropping to 3.63%.

PE: -3.1x

Interfor, a Canadian small-cap stock, reported first-quarter 2024 sales of C$813.2 million, slightly down from C$829.9 million the previous year. Despite a net loss of C$72.9 million for the quarter, lumber production increased to 1,069 million fbm from 1,031 million fbm year-over-year. Insider confidence is evident with recent share purchases by executives in early 2024. The company’s revenue is forecasted to grow at an annual rate of 7.57%, suggesting potential for future value growth despite current financial challenges.

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

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

Russel Metals (TSX:RUS)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Russel Metals is a Canadian company involved in the distribution of metals, steel products, and energy field supplies with a market cap of approximately CA$1.82 billion.

Operations: Russel Metals generates revenue primarily from its Metals Service Centers, Energy Field Stores, and Steel Distributors segments. For the period ending 2024-03-31, the company reported a gross profit margin of 21.32% and net income margin of 5.54%.

PE: 9.7x

Russel Metals, a Canadian small-cap stock, has shown insider confidence with recent share purchases. In the first quarter of 2024, they reported CAD 1.06 billion in sales and CAD 49.7 million in net income, down from last year. The company increased its quarterly dividend by 5% to CAD 0.42 per share and repurchased 300,000 shares for CAD 15 million between January and March. Additionally, they received regulatory approval for acquiring seven service centers from Samuel & Co., expected to close by Q3 2024.

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

• Examine Russel Metals' past performance report to understand how it has performed in the past.

Softchoice (TSX:SFTC)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Softchoice is a technology solutions provider specializing in IT consulting, cloud services, and software licensing with a market cap of approximately CA$1.05 billion.

Operations: Softchoice generates revenue primarily from direct marketing, with significant costs attributed to COGS and operating expenses. The company's gross profit margin has shown an upward trend, reaching 41.82% as of March 31, 2024.

PE: 19.3x

Softchoice, a Canadian tech solutions provider, has seen insider confidence with recent share purchases in early 2024. Despite reporting a net loss of US$1.03 million for Q1 2024, down from a net income of US$4.54 million the previous year, they forecast earnings growth at 17.66% annually. The company declared an increased quarterly dividend of C$0.13 per share and elected Martha Tory as a new director in May 2024, reflecting strategic shifts and potential future growth opportunities despite high debt levels and reliance on external borrowing for funding.

• Click here to discover the nuances of Softchoice with our detailed analytical valuation report.

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

Turning Ideas Into Actions

• Take a closer look at our Undervalued TSX Small Caps With Insider Buying list of 31 companies by clicking here.
• Have you diversified into these companies? Leverage the power of Simply Wall St's portfolio to keep a close eye on market movements affecting your investments.
• Maximize your investment potential with Simply Wall St, the comprehensive app that offers global market insights for free.

Looking For Alternative Opportunities?

• 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com