Exploring 3 Undervalued Small Caps In Canada With Insider Buying

The Canadian market has shown a robust performance, with a 1.4% increase over the past week and a notable 28% climb in the last year, supported by an annual earnings growth forecast of 16%. In this thriving environment, identifying stocks that are potentially undervalued and exhibit insider buying can be a promising strategy for investors seeking opportunities in the small-cap sector.

Top 10 Undervalued Small Caps With Insider Buying In Canada

Name	PE	PS	Discount to Fair Value	Value Rating
Trican Well Service	7.0x	0.9x	21.01%	★★★★★★
First National Financial	10.5x	3.4x	49.57%	★★★★★☆
VersaBank	12.0x	4.8x	49.05%	★★★★★☆
AutoCanada	NA	0.1x	39.17%	★★★★★☆
Nexus Industrial REIT	3.7x	3.7x	17.97%	★★★★☆☆
Rogers Sugar	15.6x	0.6x	47.45%	★★★★☆☆
Primaris Real Estate Investment Trust	13.0x	3.5x	44.02%	★★★★☆☆
Sagicor Financial	1.4x	0.3x	-46.47%	★★★★☆☆
Calfrac Well Services	2.5x	0.2x	19.35%	★★★★☆☆
Vermilion Energy	NA	1.2x	-5.73%	★★★★☆☆

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

Let's uncover some gems from our specialized screener.

Badger Infrastructure Solutions (TSX:BDGI)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Badger Infrastructure Solutions specializes in providing non-destructive excavating services and has a market capitalization of approximately $1.08 billion CAD.

Operations: The company generates revenue primarily from its Non-Destructive Excavating Services, with a recent gross profit margin of 28.29%. Over time, the company's cost of goods sold (COGS) and operating expenses have shown variations impacting net income margins, which recently stood at 5.81%.

PE: 24.6x

Badger Infrastructure Solutions, a Canadian company with a high debt level, is experiencing earnings growth projected at 36.26% annually. Despite relying on external borrowing for funding, the firm reported Q2 sales of US$186.84 million and net income of US$11.91 million, showing improvement from last year. Insider confidence was evident as they made share purchases recently. The Board is considering a share repurchase program, indicating potential future value enhancement for investors in this sector.

• Get an in-depth perspective on Badger Infrastructure Solutions' performance by reading our valuation report here.

• Explore historical data to track Badger Infrastructure Solutions' performance over time in our Past section.

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

Simply Wall St Value Rating: ★★★★☆☆

Overview: NorthWest Healthcare Properties Real Estate Investment Trust operates in the healthcare real estate industry, focusing on owning and managing a portfolio of healthcare properties with a market capitalization of CA$1.71 billion.

Operations: The company generates revenue primarily from the healthcare real estate industry, with recent figures at CA$523.85 million. The gross profit margin has shown variability, recently recorded at 77.81%. Operating expenses and non-operating expenses significantly impact net income, with the latest net income margin reflecting a negative trend at -75.29%.

PE: -3.3x

NorthWest Healthcare Properties REIT, a smaller player in Canada's real estate sector, has shown insider confidence with recent share purchases. The company is addressing its financial challenges by renewing key leases like Sabará Hospital and extending others with Rede D'Or, enhancing its long-term lease profile in Brazil to an average of 18.2 years. Despite reporting a net loss of C$169.95 million for the first half of 2024, earnings are projected to grow significantly at 111% annually.

• Click here and access our complete valuation analysis report to understand the dynamics of NorthWest Healthcare Properties Real Estate Investment Trust.

• Assess NorthWest Healthcare Properties Real Estate Investment Trust's past performance with our detailed historical performance reports.

Queen's Road Capital Investment (TSX:QRC)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Queen's Road Capital Investment focuses on the selection, acquisition, and management of investments, with a market cap of approximately $0.37 billion CAD.

Operations: Queen's Road Capital Investment generates revenue primarily through the selection, acquisition, and management of investments. The company has consistently reported a gross profit margin of 100%, indicating no cost of goods sold against its revenue. Operating expenses are relatively low compared to revenue, with general and administrative expenses being a significant component.

PE: 2.5x

Queen's Road Capital Investment, a small Canadian company, recently increased its annual dividend by CAD 0.002 to CAD 0.021 per share, marking a 40% rise since its first payout in 2021. This reflects the growth of their convertible debenture portfolio. The firm completed a private placement of over 21 million shares at CAD 0.70 each, raising nearly CAD 15 million in September 2024. Despite no insider buying activity reported recently, the company's proactive financial maneuvers suggest potential for future value creation amidst its high-quality earnings and external funding reliance.

• Delve into the full analysis valuation report here for a deeper understanding of Queen's Road Capital Investment.

• Understand Queen's Road Capital Investment's track record by examining our Past report.

Taking Advantage

• Explore the 22 names from our Undervalued TSX Small Caps With Insider Buying screener here.
• 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.
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Ready For A Different Approach?

• 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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