Exploring Three Undervalued Small Caps With Insider Actions In June 2024 In Canada

As of June 2024, the Canadian market is showing signs of adapting to economic shifts, with the Bank of Canada's recent decision to cut interest rates reflecting a moderated inflation rate and a tempered growth outlook. This evolving economic landscape could present opportunities for investors interested in undervalued small-cap stocks, particularly those where insider actions suggest unrecognized potential.

Top 10 Undervalued Small Caps With Insider Buying In Canada

Name	PE	PS	Discount to Fair Value	Value Rating
Dundee Precious Metals	8.0x	2.8x	47.52%	★★★★★★
Nexus Industrial REIT	2.3x	2.8x	20.37%	★★★★★★
Canaccord Genuity Group	NA	0.5x	39.89%	★★★★★★
Guardian Capital Group	9.9x	3.8x	35.24%	★★★★★☆
Calfrac Well Services	2.2x	0.2x	5.58%	★★★★★☆
Primaris Real Estate Investment Trust	11.5x	3.0x	35.06%	★★★★★☆
Sagicor Financial	1.2x	0.4x	-95.16%	★★★★☆☆
Gear Energy	19.0x	1.3x	32.10%	★★★☆☆☆
Freehold Royalties	15.2x	6.5x	48.09%	★★★☆☆☆
AutoCanada	11.4x	0.1x	-120.02%	★★★☆☆☆

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

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

Interfor (TSX:IFP)

Simply Wall St Value Rating: ★★★★★★

Overview: Interfor is a lumber company specializing in solid wood products with a market capitalization of approximately CA$1.27 billion.

Operations: Solid Wood generated CA$3.30 billion in revenue, with a notable shift in gross profit margin from 0.036% to 0.159% over recent periods, reflecting significant fluctuations in operational efficiency and market conditions.

PE: -3.1x

Despite a challenging quarter where Interfor reported a net loss and a slight drop in sales, the company showcased resilience by increasing lumber production year-over-year. This growth in output, alongside recent insider confidence demonstrated through share purchases, suggests a robust belief in the firm's potential. With no customer deposits and liabilities fully covered by external borrowings, financial agility remains evident. Looking ahead, this blend of insider activity and operational adjustments positions Interfor intriguingly for those eyeing underpriced opportunities within Canada’s smaller companies landscape.

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

• Evaluate Interfor's historical performance by accessing our past performance report.

Jamieson Wellness (TSX:JWEL)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Jamieson Wellness is a company specializing in the manufacture and distribution of natural health products, with a market capitalization of approximately CA$1.08 billion.

Operations: Jamieson Brands and Strategic Partners generated revenues of CA$558.41 million and CA$109.08 million respectively, with a notable gross profit margin increase to 35.40% by the end of the reporting period from an earlier 26.73%. This reflects a rising efficiency in managing production costs relative to sales over time.

PE: 31.6x

Despite a challenging quarter where Jamieson Wellness reported a net loss and decreased sales, insider confidence remains high with recent share purchases signaling strong belief in the company's resilience. Maintaining its revenue outlook for 2024, the company projects significant growth, expecting revenues between CA$720 million to CA$760 million. This projection alongside consistent dividend payments underscores its potential rebound and appeal as an attractively priced entity in the market.

• Unlock comprehensive insights into our analysis of Jamieson Wellness stock in this valuation report.

• Gain insights into Jamieson Wellness' historical performance by reviewing our past performance report.

Queen's Road Capital Investment (TSX:QRC)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Queen's Road Capital Investment primarily focuses on the selection, acquisition, and management of investments.

Operations: The company generates revenue through the selection, acquisition, and management of investments, achieving a gross profit margin consistently at 100% across various reporting periods. Notably, from the last available data point in 2024, it reported a net income of $69.34 million on revenues of $73.40 million, reflecting an efficient operational structure with operating expenses at $3.39 million and a high net income margin of approximately 94.46%.

PE: 4.0x

Queen's Road Capital Investment recently showcased a significant turnaround, with its second-quarter revenue jumping to US$18.42 million from a negative figure last year, alongside a net income of US$16.82 million. This performance marks an impressive recovery, reflecting strong earnings quality driven by substantial non-cash components. Additionally, insiders demonstrated confidence in the company's trajectory through recent share purchases, further underscoring its potential despite relying solely on higher-risk external borrowing for funding.

• Get an in-depth perspective on Queen's Road Capital Investment's performance by reading our valuation report here.

• Assess Queen's Road Capital Investment's past performance with our detailed historical performance reports.

Taking Advantage

• Dive into all 31 of the Undervalued TSX Small Caps With Insider Buying we have identified here.
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Searching for a Fresh Perspective?

• 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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