Exploring July 2024 Canadian Undervalued Small Caps With Insider Actions

Amidst fluctuating global markets, Canadian small-cap stocks have shown notable resilience and upward momentum, particularly as interest rates decline and the Bank of Canada adopts a more accommodative monetary policy. In this context, identifying undervalued small caps with insider actions can offer investors potential opportunities for growth, especially in an environment where broader market leadership is expected to continue expanding.

Top 10 Undervalued Small Caps With Insider Buying In Canada

Name	PE	PS	Discount to Fair Value	Value Rating
Dundee Precious Metals	8.8x	3.0x	45.84%	★★★★★★
Martinrea International	5.8x	0.2x	49.99%	★★★★★★
First National Financial	8.7x	3.0x	48.40%	★★★★★☆
Calfrac Well Services	2.3x	0.2x	28.79%	★★★★★☆
Nexus Industrial REIT	2.8x	3.5x	13.99%	★★★★☆☆
Guardian Capital Group	10.4x	4.0x	30.90%	★★★★☆☆
Sagicor Financial	1.2x	0.4x	-88.67%	★★★★☆☆
Primaris Real Estate Investment Trust	12.0x	3.1x	32.38%	★★★★☆☆
Russel Metals	9.4x	0.5x	-10.77%	★★★☆☆☆
AutoCanada	11.5x	0.1x	-101.58%	★★★☆☆☆

Click here to see the full list of 29 stocks from our Undervalued TSX Small Caps With Insider Buying screener.

Let's explore several standout options from the results in the screener.

Exchange Income (TSX:EIF)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Exchange Income is a diversified company operating primarily in the manufacturing and aerospace & aviation sectors, with a market capitalization of approximately CA$1.57 billion.

Operations: Manufacturing and Aerospace & Aviation are the primary revenue segments for this entity, generating CA$1.03 billion and CA$1.54 billion respectively. The company has observed a gross profit margin of approximately 34.55% as of the latest reporting period in 2024.

PE: 19.1x

Exchange Income's recent dividend affirmations, with consistent monthly payouts of CA$0.22 per share, underscore a stable financial gesture amid fluctuating earnings—CA$4.53 million net income in Q1 2024 down from CA$6.86 million year-over-year. Despite this dip, revenue growth remains evident, climbing to CA$601.77 million from CA$526.84 million previously. With no new shares repurchased since March 2024 and external borrowing as its sole funding source, the company reflects a cautious yet steady approach in capital management.

• Take a closer look at Exchange Income's potential here in our valuation report.

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

Nexus Industrial REIT (TSX:NXR.UN)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Nexus Industrial REIT is a real estate investment trust specializing in industrial properties, with a market capitalization of approximately CA$1.62 billion.

Operations: From the provided financial data, the company has demonstrated a notable increase in gross profit margin from 0.15% to 0.72% over a series of reporting periods, reflecting an improving efficiency in managing its cost of goods sold relative to revenue. This trend is complemented by significant growth in net income, escalating from negative values to CA$199.98 million, indicating robust profitability and operational success.

PE: 2.8x

Nexus Industrial REIT, reflecting a robust financial trajectory with a notable increase in Q1 2024 earnings to CAD 43.67 million from CAD 3.72 million year-over-year, demonstrates strong market positioning. Recently, they've strategically shifted focus by divesting non-core assets to fortify their industrial holdings, aiming for sales around CAD 200 million to alleviate debt. Insider confidence is evident as they recently purchased shares, underscoring belief in the company's direction amidst operational adjustments and consistent dividend affirmations.

• Navigate through the intricacies of Nexus Industrial REIT with our comprehensive valuation report here.

• Understand Nexus Industrial REIT's track record by examining our Past report.

Primaris Real Estate Investment Trust (TSX:PMZ.UN)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Primaris Real Estate Investment Trust specializes in the ownership, management, and development of its investment properties.

Operations: The entity generates a gross profit margin of 56.72% as of the latest period in 2024, reflecting its revenue from the ownership, management, and development of investment properties which totaled CA$433.82 million. Over recent years, this margin has shown variability but remains indicative of the cost structure relative to generated revenues.

PE: 12.0x

Primaris Real Estate Investment Trust, a contender in the Canadian small-cap market, recently saw significant insider confidence with Patrick Sullivan acquiring 20,000 shares for CA$272,000. This move reflects a notable increase of 36% in their holdings. Financially robust with Q1 sales jumping to CA$119 million from CA$96 million year-over-year and net income rising to CA$45 million, the trust consistently affirms dividends—CA$0.07 per unit monthly—underscoring stable returns amidst volatile markets. Their strategic share repurchases further attest to a proactive approach in enhancing shareholder value.

• Click here to discover the nuances of Primaris Real Estate Investment Trust with our detailed analytical valuation report.

• Gain insights into Primaris Real Estate Investment Trust's past trends and performance with our Past report.

Turning Ideas Into Actions

• Take a closer look at our Undervalued TSX Small Caps With Insider Buying list of 29 companies by clicking here.
• 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.
• Take control of your financial future using Simply Wall St, offering free, in-depth knowledge of international markets to every investor.

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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