Undiscovered Gems In Canada To Watch This September 2024

The Canadian market has experienced a modest decline recently, with the TSX down about 3%, reflecting broader economic uncertainties and softer labor market data in both Canada and the U.S. Despite these challenges, long-term investors might find opportunities in lesser-known stocks that exhibit strong fundamentals and resilience amid current market conditions.

Top 10 Undiscovered Gems With Strong Fundamentals In Canada

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
TWC Enterprises	6.74%	10.99%	25.68%	★★★★★★
Reconnaissance Energy Africa	NA	15.28%	7.58%	★★★★★★
Taiga Building Products	NA	6.05%	10.50%	★★★★★★
Amerigo Resources	12.87%	7.49%	12.97%	★★★★★☆
Tenaz Energy	NA	33.64%	50.62%	★★★★★☆
Firan Technology Group	17.91%	3.75%	23.32%	★★★★★☆
Mako Mining	22.90%	38.12%	54.79%	★★★★★☆
Pizza Pizza Royalty	15.66%	3.64%	3.95%	★★★★☆☆
Queen's Road Capital Investment	7.20%	22.14%	22.20%	★★★★☆☆
Genesis Land Development	53.32%	25.58%	47.05%	★★★★☆☆

Click here to see the full list of 44 stocks from our TSX Undiscovered Gems With Strong Fundamentals screener.

We're going to check out a few of the best picks from our screener tool.

Hammond Power Solutions (TSX:HPS.A)

Simply Wall St Value Rating: ★★★★★★

Overview: Hammond Power Solutions Inc., along with its subsidiaries, designs, manufactures, and sells various transformers across Canada, the United States, Mexico, and India with a market cap of CA$1.41 billion.

Operations: Hammond Power Solutions generates revenue primarily from the manufacture and sale of transformers, amounting to CA$754.37 million. The company has a market capitalization of CA$1.41 billion.

Hammond Power Solutions, a small cap in the electrical industry, has been making waves with its impressive financial performance. Recently, it reported Q2 2024 sales of CAD 197.21 million and net income of CAD 23.59 million, up from CAD 172.45 million and CAD 13.33 million respectively a year ago. The company’s debt to equity ratio has improved significantly from 27.7% to just 5% over the past five years, and earnings growth of 12.3% outpaced the industry average of 6.5%. Additionally, Hammond's interest payments are well covered by EBIT at an impressive ratio of 87.6x.

• Dive into the specifics of Hammond Power Solutions here with our thorough health report.

• Examine Hammond Power Solutions' past performance report to understand how it has performed in the past.

North West (TSX:NWC)

Simply Wall St Value Rating: ★★★★★★

Overview: The North West Company Inc., with a market cap of CA$2.49 billion, operates through its subsidiaries to retail food and everyday products and services in rural communities and urban neighborhood markets across northern Canada, rural Alaska, the South Pacific, and the Caribbean.

Operations: North West generated CA$2.52 billion in revenue from retailing food and everyday products and services. The company reported a net profit margin of 3.5%.

North West's debt to equity ratio has impressively reduced from 96.7% to 43.2% over the past five years, reflecting stronger financial health. The company’s earnings grew by 9.5% in the last year, outpacing the Consumer Retailing industry at -7.7%. Trading at nearly 44% below its estimated fair value, North West offers significant upside potential. Additionally, interest payments are well covered by EBIT with a coverage of 10.9x, showcasing robust profitability and prudent debt management.

• Click to explore a detailed breakdown of our findings in North West's health report.

• Learn about North West's historical performance.

Silvercorp Metals (TSX:SVM)

Simply Wall St Value Rating: ★★★★★★

Overview: Silvercorp Metals Inc., with a market cap of CA$993.70 million, is involved in the acquisition, exploration, development, and mining of mineral properties through its subsidiaries.

Operations: Silvercorp Metals generates revenue primarily from its mining operations in Henan Luoning ($200 million) and Guangdong ($27.35 million). The company's net profit margin is 24.50%.

Silvercorp Metals, a small-cap miner, reported first-quarter revenue of US$72.17 million, up from US$60.01 million last year. Net income surged to US$21.94 million compared to US$9.22 million previously, with basic earnings per share rising to $0.12 from $0.05. Despite significant insider selling recently and shareholder dilution over the past year, the company remains debt-free and boasts high-quality earnings while trading at 89% below its estimated fair value.

• Navigate through the intricacies of Silvercorp Metals with our comprehensive health report here.

• Evaluate Silvercorp Metals' historical performance by accessing our past performance report.

Taking Advantage

• Click here to access our complete index of 44 TSX Undiscovered Gems With Strong Fundamentals.
• Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St's portfolio to get a 360-degree view on how they're shaping up.
• Simply Wall St is a revolutionary app designed for long-term stock investors, it's free and covers every market in the world.

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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