Exploring 3 Undervalued Small Caps In Canada With Insider Action

The Canadian small-cap market is navigating a complex landscape influenced by shifting Federal Reserve expectations, where a more gradual rate-cutting cycle and concerns over U.S. fiscal policies are shaping investor sentiment. As the market adjusts to these economic signals, identifying promising small-cap stocks with insider activity can offer valuable insights for investors looking to capitalize on potential opportunities amidst changing conditions.

Top 10 Undervalued Small Caps With Insider Buying In Canada

Name	PE	PS	Discount to Fair Value	Value Rating
Trican Well Service	6.7x	0.8x	24.83%	★★★★★★
AutoCanada	NA	0.1x	41.39%	★★★★★★
First National Financial	10.8x	3.5x	49.11%	★★★★★☆
Nexus Industrial REIT	3.6x	3.6x	20.08%	★★★★★☆
Rogers Sugar	15.2x	0.6x	48.73%	★★★★☆☆
Primaris Real Estate Investment Trust	12.9x	3.4x	45.33%	★★★★☆☆
Sagicor Financial	1.3x	0.3x	-45.30%	★★★★☆☆
Calfrac Well Services	2.5x	0.2x	18.59%	★★★★☆☆
Vermilion Energy	NA	1.1x	-203.19%	★★★★☆☆
StorageVault Canada	NA	5.2x	-641.05%	★★★☆☆☆

Click here to see the full list of 25 stocks from our Undervalued TSX Small Caps With Insider Buying screener.

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

Nexus Industrial REIT (TSX:NXR.UN)

Simply Wall St Value Rating: ★★★★★☆

Overview: Nexus Industrial REIT is a Canadian real estate investment trust focused on owning and managing industrial properties, with a market capitalization of CA$1.06 billion.

Operations: Nexus Industrial REIT generates revenue primarily from its investment properties, with the latest reported revenue at CA$167.21 million. The company's gross profit margin has shown a trend of stability around 71.56% recently, reflecting efficient management of cost of goods sold relative to revenue. Operating expenses have been relatively controlled, contributing to a robust net income margin that reached 99.45% in the most recent period.

PE: 3.6x

Nexus Industrial REIT, a small Canadian real estate investment trust, is attracting attention due to its insider confidence. Recent purchases by insiders indicate faith in the company's prospects. Despite challenges like reliance on external borrowing and shareholder dilution over the past year, Nexus reported Q2 2024 sales of C$43.91 million, up from C$38.42 million a year ago. The appointment of Mary Vitug to the board adds strategic depth with her extensive capital markets experience.

• Click to explore a detailed breakdown of our findings in Nexus Industrial REIT's valuation report.

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

Rogers Sugar (TSX:RSI)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Rogers Sugar is a Canadian company engaged in the production and distribution of sugar and maple products, with a market capitalization of approximately CA$0.52 billion.

Operations: Rogers Sugar generates revenue primarily from its sugar and maple products segments, with recent figures showing CA$981.45 million from sugar and CA$225.32 million from maple products. The company's gross profit margin has experienced fluctuations, reaching a peak of 22.72% in late 2016 before settling at 13.87% by mid-2024, reflecting variations in cost management over time.

PE: 15.2x

Rogers Sugar, a smaller Canadian company, has shown insider confidence with share purchases in the past year. Despite facing challenges like increased debt from external borrowing and reduced net income of C$7.38 million for Q3 2024 compared to C$14.18 million a year ago, the company maintains steady sales growth reaching C$309.09 million this quarter. The board's decision to declare a quarterly dividend of C$0.09 per share underscores its commitment to returning value to shareholders amidst financial pressures.

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

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

Sagicor Financial (TSX:SFC)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Sagicor Financial operates as a financial services provider with key segments in life insurance and related financial products across regions including Sagicor Life, Sagicor Jamaica, and Sagicor Life USA, and has a market capitalization of approximately CA$1.22 billion.

Operations: Sagicor Financial derives its revenue primarily from Sagicor Jamaica and Sagicor Life, with significant contributions from segment adjustments. The company's gross profit margin has shown variation, reaching 48.19% in the quarter ending June 2023 and 40.03% by June 2024. Operating expenses are a notable component of the cost structure, impacting overall profitability alongside non-operating expenses.

PE: 1.3x

Sagicor Financial, a small Canadian company, recently reported a net loss of US$40.24 million for Q2 2024, contrasting with the previous year's profit. Despite this downturn, insider confidence is evident as Gilbert Palter acquired 225,000 shares for approximately CA$1.26 million. The company continues to pay dividends consistently and completed a share repurchase program totaling $9.79 million over several months in 2023-2024. However, earnings are forecasted to decline significantly over the next three years due to reliance on external borrowing rather than customer deposits for funding.

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

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

Summing It All Up

• Access the full spectrum of 25 Undervalued TSX Small Caps With Insider Buying by clicking on this link.
• 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.
• Invest smarter with the free Simply Wall St app providing detailed insights into every stock market around the globe.

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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