Exploring Three Undervalued Small Caps In Canada With Insider Buying

Amidst a backdrop of softening labor markets and potential interest rate cuts by central banks in both the U.S. and Canada, the Canadian TSX has experienced a slight decline, mirroring broader market trends. In this environment of economic uncertainty, identifying undervalued small-cap stocks with insider buying can offer unique opportunities for investors seeking to capitalize on potentially better prices.

Top 10 Undervalued Small Caps With Insider Buying In Canada

Name	PE	PS	Discount to Fair Value	Value Rating
Trican Well Service	7.3x	0.9x	17.52%	★★★★★☆
Nexus Industrial REIT	3.7x	3.7x	20.79%	★★★★★☆
VersaBank	9.8x	4.0x	13.13%	★★★★☆☆
Hemisphere Energy	5.4x	2.1x	19.18%	★★★★☆☆
Rogers Sugar	15.2x	0.6x	48.73%	★★★★☆☆
Sagicor Financial	1.3x	0.3x	-37.78%	★★★★☆☆
Calfrac Well Services	2.5x	0.2x	-57.91%	★★★★☆☆
Primaris Real Estate Investment Trust	12.3x	3.3x	40.29%	★★★★☆☆
BTB Real Estate Investment Trust	9.7x	2.4x	33.54%	★★★★☆☆
Foraco International	4.6x	0.4x	-7.04%	★★★☆☆☆

Click here to see the full list of 23 stocks from our Undervalued TSX Small Caps With Insider Buying screener.

Here we highlight a subset of our preferred stocks from the screener.

Chemtrade Logistics Income Fund (TSX:CHE.UN)

Simply Wall St Value Rating: ★★★★★★

Overview: Chemtrade Logistics Income Fund operates in the chemical industry, providing industrial chemicals and services with a market cap of approximately CA$0.69 billion.

Operations: Chemtrade Logistics Income Fund generates revenue primarily from its EC and SWC segments, with recent quarterly revenues reaching CA$1.77 billion. The company's gross profit margin has shown variability, peaking at 23.63% in Q3 2023.

PE: 8.4x

Chemtrade Logistics Income Fund, a small Canadian company, has recently filed a Shelf Registration and completed a CAD 250 million fixed-income offering. Despite reporting lower Q2 2024 sales (CAD 448.1 million) and net income (CAD 14.6 million) compared to the previous year, insider confidence remains evident with share repurchases of CAD 5.08 million from May to August 2024. The company's consistent monthly cash distributions of $0.055 per unit highlight its commitment to returning value to shareholders amidst challenging earnings forecasts and high debt levels.

• Click here to discover the nuances of Chemtrade Logistics Income Fund with our detailed analytical valuation report.

• Review our historical performance report to gain insights into Chemtrade Logistics Income Fund's's past performance.

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 a portfolio of industrial properties, with a market cap of approximately CA$1.12 billion.

Operations: Nexus Industrial REIT generates revenue primarily from its investment properties, with a recent quarterly revenue of CA$167.21 million. The company's gross profit margin has shown an upward trend, reaching 71.56% in the latest quarter, while operating expenses stood at CA$8.65 million.

PE: 3.7x

Nexus Industrial REIT, a smaller Canadian player, has caught attention due to insider confidence with significant share purchases in the last quarter. Despite earnings forecasted to decline by 46.2% annually over the next three years, Nexus reported Q2 2024 sales of C$43.91 million, up from C$38.42 million year-over-year. However, net income dropped to C$43.53 million from C$77.22 million last year due to large one-off items impacting financial results. Recent dividend affirmations indicate stability with consistent cash distributions of $0.64 per unit annually through November 2024.

• Dive into the specifics of Nexus Industrial REIT here with our thorough valuation report.

• Assess Nexus Industrial REIT's past performance with our detailed historical performance reports.

Rogers Sugar (TSX:RSI)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Rogers Sugar operates in the production and distribution of sugar and maple products with a market cap of CA$0.53 billion.

Operations: Rogers Sugar generates revenue primarily from its Sugar segment (CA$981.45 million) and Maple Products segment (CA$225.32 million). The company has shown fluctuations in net income margin, with recent data indicating a margin of 4.50% for the period ending December 30, 2023.

PE: 15.2x

Rogers Sugar, a Canadian small-cap company, reported CAD 309.09 million in sales for Q3 2024, up from CAD 262.29 million the previous year. However, net income fell to CAD 7.38 million from CAD 14.18 million year-over-year. For the nine months ending June 29, sales reached CAD 898.73 million while net income was CAD 35.17 million compared to last year's figures of CAD 796.68 million and CAD 39.91 million respectively. Despite lower earnings per share this period (CAD .06 vs .13), insider confidence is evident with recent share purchases by executives over the past six months indicating potential future value growth amidst steady dividend payouts of $0.09 per share announced on August 8th for October distribution.

• Take a closer look at Rogers Sugar's potential here in our valuation report.

• Explore historical data to track Rogers Sugar's performance over time in our Past section.

Turning Ideas Into Actions

• Click here to access our complete index of 23 Undervalued TSX Small Caps With Insider Buying.
• Hold shares in these firms? Setup your portfolio in Simply Wall St to seamlessly track your investments and receive personalized updates on your portfolio's performance.
• Simply Wall St is a revolutionary app designed for long-term stock investors, it's free and covers every market in the world.

Contemplating Other Strategies?

• 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com