February 2025's Undervalued Small Caps With Insider Action On TSX

In the wake of the Bank of Canada's recent rate cut, aimed at countering tariff uncertainties and a contracting economy, Canadian small-cap stocks have become an area of interest for investors seeking potential opportunities on the TSX. As economic indicators suggest a possible rebound and lower borrowing costs, identifying small-cap companies with insider action could be key to uncovering value in this evolving market landscape.

Top 10 Undervalued Small Caps With Insider Buying In Canada

Name	PE	PS	Discount to Fair Value	Value Rating
Primaris Real Estate Investment Trust	12.1x	3.2x	45.15%	★★★★★★
Nexus Industrial REIT	12.1x	3.0x	26.60%	★★★★★☆
Savaria	28.4x	1.5x	32.98%	★★★★☆☆
Parex Resources	3.6x	0.8x	-3.78%	★★★★☆☆
Baytex Energy	NA	0.8x	-109.97%	★★★★☆☆
Bonterra Energy	4.9x	0.5x	35.12%	★★★★☆☆
Calfrac Well Services	11.7x	0.2x	49.07%	★★★☆☆☆
Allied Gold	NA	1.5x	-252.50%	★★★☆☆☆
Saturn Oil & Gas	2.0x	0.6x	-87.17%	★★★☆☆☆
Minto Apartment Real Estate Investment Trust	NA	5.6x	16.54%	★★★☆☆☆

Click here to see the full list of 26 stocks from our Undervalued TSX Small Caps With Insider Buying screener.

Underneath we present a selection of stocks filtered out by our screen.

First National Financial (TSX:FN)

Simply Wall St Value Rating: ★★★★★☆

Overview: First National Financial is a Canadian company specializing in mortgage lending, with operations focused on commercial and residential segments, and a market cap of approximately CA$2.68 billion.

Operations: The company generates revenue primarily from residential and commercial segments, with residential contributing significantly more. Over recent periods, the gross profit margin has shown an upward trend, reaching 86.04% in September 2024. Operating expenses have been a substantial part of costs, with general and administrative expenses consistently forming a major component.

PE: 13.4x

First National Financial, a small Canadian company, attracts attention with its insider confidence shown by Stephen J. Smith's purchase of 463,300 shares for C$20.44 million in recent months. Despite relying entirely on external borrowing for funding, the firm maintains consistent dividend payments of C$0.21 per share monthly and forecasts annual earnings growth of 15.68%. While debt coverage remains a concern, these factors suggest potential value in this stock's future prospects amidst Canada's undervalued market segment.

• Take a closer look at First National Financial's potential here in our valuation report.

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

Savaria (TSX:SIS)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Savaria is a company that specializes in manufacturing and distributing accessibility solutions, such as stairlifts and wheelchair lifts, with a market capitalization of CA$1.14 billion.

Operations: The company generates revenue primarily from its Patient Care segment, with significant adjustments contributing to the total. Over recent periods, the gross profit margin has shown an upward trend, reaching 36.20% by September 2024. Operating expenses and non-operating expenses are notable cost components impacting net income.

PE: 28.4x

Savaria, a Canadian company in the accessibility industry, shows potential as an undervalued investment. With insider confidence reflected by Marcel Bourassa's recent purchase of 65,000 shares worth approximately C$1.06 million in January 2025, there's a positive signal about its prospects. Despite relying solely on external borrowing for funding and facing large one-off items affecting earnings quality, the company maintains consistent monthly dividends of C$0.045 per share and anticipates annual earnings growth of 31%.

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

• Learn about Savaria's historical performance.

Winpak (TSX:WPK)

Simply Wall St Value Rating: ★★★★★☆

Overview: Winpak is a company that specializes in manufacturing and distributing packaging materials and machinery, with a market capitalization of approximately C$2.63 billion.

Operations: Winpak generates revenue primarily from three segments: Flexible Packaging, Rigid Packaging and Flexible Lidding, and Packaging Machinery. The company has experienced fluctuations in its gross profit margin, reaching 31.12% in the latest period.

PE: 12.4x

Winpak, a Canadian packaging company, has caught attention as a potential undervalued opportunity. Despite relying entirely on external borrowing for funding, which poses higher risks compared to customer deposits, the company's earnings are projected to grow at 5% annually. Insider confidence is evident from recent share purchases by key stakeholders over the past year. Additionally, Winpak announced a special one-time dividend of C$3 per share and a regular dividend of C$0.05 per share payable in January 2025, signaling robust cash flow management and shareholder value focus.

• Navigate through the intricacies of Winpak with our comprehensive valuation report here.

• Assess Winpak's past performance with our detailed historical performance reports.

Seize The Opportunity

• Access the full spectrum of 26 Undervalued TSX Small Caps With Insider Buying by clicking on this link.
• Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments.
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Ready To Venture Into Other Investment Styles?

• 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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