Exploring Three Undervalued Small Caps In Canada With Insider Buying

As 2024 unfolds, the Canadian market has exhibited a robust performance, particularly in sectors like technology, while small-cap equities have not fared as well in comparison. This mixed landscape underscores the importance of looking beyond broad market movements and focusing on specific opportunities that may be undervalued. In this context, understanding insider buying trends can provide valuable insights into potential growth areas within Canada's small-cap domain.

Top 10 Undervalued Small Caps With Insider Buying In Canada

Name	PE	PS	Discount to Fair Value	Value Rating
Dundee Precious Metals	8.3x	2.9x	44.74%	★★★★★☆
Primaris Real Estate Investment Trust	11.4x	2.9x	37.06%	★★★★★☆
Nexus Industrial REIT	2.4x	3.0x	18.64%	★★★★☆☆
Calfrac Well Services	2.3x	0.2x	5.46%	★★★★☆☆
Russel Metals	9.0x	0.5x	-5.57%	★★★★☆☆
Guardian Capital Group	10.4x	4.0x	32.14%	★★★★☆☆
Sagicor Financial	1.2x	0.4x	-96.26%	★★★★☆☆
Trican Well Service	8.5x	1.0x	-19.09%	★★★☆☆☆
Westshore Terminals Investment	14.4x	3.9x	0.90%	★★★☆☆☆
Freehold Royalties	15.5x	6.7x	48.11%	★★★☆☆☆

Click here to see the full list of 34 stocks from our Undervalued TSX Small Caps With Insider Buying screener.

Below we spotlight a couple of our favorites from our exclusive screener.

Dundee Precious Metals (TSX:DPM)

Simply Wall St Value Rating: ★★★★★☆

Overview: Dundee Precious Metals is a gold mining company with operations at Ada Tepe and Chelopech, boasting a market capitalization of approximately $1.10 billion.

Operations: Ada Tepe and Chelopech generated revenues of $243.33 million and $274.18 million respectively, contributing significantly to the overall financial performance. The company's gross profit margin showed a notable increase over the observed periods, highlighting an improving efficiency in managing production costs relative to revenue.

PE: 8.3x

Dundee Precious Metals, a lesser-known yet promising player in the Canadian mining sector, recently bolstered its leadership with the appointment of W. John DeCooman Jr., signaling strategic growth and insider confidence. With first-quarter sales reaching US$124 million and net income at US$46 million, their financial health appears stable. The company's reaffirmed production guidance for 2024 and ongoing advancements in their Serbian project underline potential for significant output increases, enhancing its appeal among undervalued entities.

• Delve into the full analysis valuation report here for a deeper understanding of Dundee Precious Metals.

• Examine Dundee Precious Metals' past performance report to understand how it has performed in the past.

Jamieson Wellness (TSX:JWEL)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Jamieson Wellness is a company focused on the manufacture and distribution of natural health products, with a market capitalization of approximately CA$1.25 billion.

Operations: Jamieson Brands and Strategic Partners generated revenues of CA$558.41 million and CA$109.08 million respectively, reflecting the company's diversified income streams within the wellness sector. Over recent periods, gross profit margins have shown variability but remained above 35%, indicative of cost management relative to revenue generation in a competitive market.

PE: 32.9x

Despite a challenging quarter where Jamieson Wellness reported a decline in sales to CAD 128 million and swung to a net loss of CAD 4.11 million from a profit last year, the company's commitment to shareholder returns remains evident. Recently, they repurchased 29,800 shares for CAD 0.95 million, completing an ongoing buyback program with over one million shares bought back. This activity underscores insider confidence in the firm’s prospects amidst maintaining revenue guidance between CAD 720 million and CAD 760 million for the year. Moreover, consistent dividend payments further reflect stability and management's belief in its financial health and future growth potential.

• Unlock comprehensive insights into our analysis of Jamieson Wellness stock in this valuation report.

• Review our historical performance report to gain insights into Jamieson Wellness''s past performance.

Softchoice (TSX:SFTC)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Softchoice is a technology company specializing in IT solutions and services, with a market capitalization of approximately $1.12 billion.

Operations: Direct Marketing has seen a notable increase in gross profit margin, rising from 23.91% in 2018 to 41.82% by mid-2024, reflecting improved efficiency or pricing strategies despite fluctuating revenues which peaked at $957.49 million in late 2022 before settling to $777.35 million by mid-2024. This trend suggests a strengthening in the company's operational focus on profitability over this period.

PE: 20.2x

Recently, Softchoice has demonstrated insider confidence with significant share purchases, signaling a robust belief in the company's prospects despite its challenging financial performance in Q1 2024. With sales dropping to US$169.76 million from US$208.82 million year-over-year and a shift to a net loss of US$1.03 million, the landscape seems tough. However, insiders' actions suggest potential unrecognized strengths in this enterprise. Adding to its appeal is an increased dividend payout of CAD 0.13 per share announced on May 7, reflecting an 18% rise from the previous year and underscoring commitment to shareholder returns even during downturns.

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

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

Make It Happen

• Unlock more gems! Our Undervalued TSX Small Caps With Insider Buying screener has unearthed 31 more companies for you to explore.Click here to unveil our expertly curated list of 34 Undervalued TSX Small Caps With Insider Buying.
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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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