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

As we enter February 2025, the Canadian market is navigating a landscape marked by persistent inflation and a solid labor market, with the Bank of Canada focusing on potential downside risks to growth. Amid these crosscurrents, small-cap stocks on the TSX are drawing attention for their potential value opportunities, particularly as leadership rotations challenge tech's dominance and earnings growth accelerates outside of major U.S. indices. In this environment, identifying small-cap stocks with strong fundamentals and insider activity can be crucial for investors looking to capitalize on undervalued opportunities in Canada's dynamic market landscape.

Top 10 Undervalued Small Caps With Insider Buying In Canada

Name	PE	PS	Discount to Fair Value	Value Rating
First National Financial	13.7x	3.9x	42.67%	★★★★★☆
Boston Pizza Royalties Income Fund	11.9x	7.7x	32.35%	★★★★★☆
Nexus Industrial REIT	12.0x	3.0x	22.98%	★★★★★☆
Vermilion Energy	NA	1.1x	-6860.60%	★★★★☆☆
Bonterra Energy	5.3x	0.6x	28.25%	★★★★☆☆
Parex Resources	3.9x	0.9x	-19.68%	★★★☆☆☆
Primaris Real Estate Investment Trust	20.0x	3.2x	46.96%	★★★☆☆☆
Calfrac Well Services	12.0x	0.2x	-39.09%	★★★☆☆☆
Saturn Oil & Gas	2.0x	0.6x	-94.72%	★★★☆☆☆
Minto Apartment Real Estate Investment Trust	NA	5.4x	13.80%	★★★☆☆☆

Click here to see the full list of 27 stocks from our Undervalued TSX Small Caps With Insider Buying screener.

Let's uncover some gems from our specialized screener.

Badger Infrastructure Solutions (TSX:BDGI)

Simply Wall St Value Rating: ★★★★★★

Overview: Badger Infrastructure Solutions provides non-destructive excavating services and has a market cap of approximately C$1.23 billion.

Operations: The primary revenue stream is from non-destructive excavating services, generating $730.92 million. The company's gross profit margin has shown an upward trend, reaching 28.47% as of the latest period. Operating expenses and cost of goods sold are significant components impacting financial performance, with operating expenses at $134.60 million and COGS at $522.81 million in the most recent quarter.

PE: 22.7x

Badger Infrastructure Solutions, a smaller Canadian stock, is attracting attention due to its growth potential and recent insider confidence. With earnings projected to grow 38% annually, the company shows promise despite relying entirely on higher-risk external borrowing. The recent appointment of George Williams, with extensive utility industry experience, to the board may bolster strategic direction. A quarterly dividend of C$0.18 per share underscores financial commitment to shareholders amidst these developments.

• Click to explore a detailed breakdown of our findings in Badger Infrastructure Solutions' valuation report.

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

Exchange Income (TSX:EIF)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Exchange Income is a diversified company operating primarily in the aerospace, aviation, and manufacturing sectors with a market capitalization of CA$2.59 billion.

Operations: The company generates revenue primarily from its Aerospace & Aviation segment (CA$1.61 billion) and Manufacturing segment (CA$1.01 billion). The gross profit margin has shown fluctuations, reaching 35.72% in the latest period. Operating expenses and non-operating expenses are significant components of the cost structure, with general and administrative expenses being a notable part of operating costs.

PE: 21.4x

Exchange Income, a small player in Canada, is gaining attention for its potential. Despite relying solely on external borrowing, which poses higher risk, the company shows insider confidence with recent share purchases over the past six months. Consistent monthly dividends of C$0.22 per share reflect stability and shareholder value focus. Earnings are projected to grow by 25% annually, suggesting promising future prospects despite current financial challenges.

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

• Gain insights into Exchange Income's past trends and performance with our Past report.

Evertz Technologies (TSX:ET)

Simply Wall St Value Rating: ★★★★★☆

Overview: Evertz Technologies is a company that specializes in providing television broadcast equipment, with operations generating revenue primarily from this market segment.

Operations: The company's revenue is primarily derived from the television broadcast equipment market, with recent figures showing CA$494.95 million. The gross profit margin has shown an upward trend, reaching 59.28% in July 2024 and slightly decreasing to 59.18% by October 2024. Operating expenses have increased over time, with research and development being a significant component, amounting to CA$133.27 million in October 2024.

PE: 15.8x

Evertz Technologies, a Canadian company, is gaining attention in the investment community with its strategic moves and insider confidence. Recently, they have been integrating cutting-edge intoPIX technology to enhance their AV-over-IP solutions, promising ultra-low latency and efficient compression for professional applications. Despite a decline in sales and net income over the past year, Evertz has shown commitment to shareholder value through dividends and share repurchases amounting to CAD 2.56 million as of October 2024. With earnings expected to grow at an annual rate of 8.16%, this company presents potential growth opportunities within its industry niche.

• Take a closer look at Evertz Technologies' potential here in our valuation report.

• Evaluate Evertz Technologies' historical performance by accessing our past performance report.

Next Steps

• Unlock our comprehensive list of 27 Undervalued TSX Small Caps With Insider Buying by clicking here.
• 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 For A Different Approach?

• 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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