Three Undervalued Small Caps In Canada With Insider Buying

As the Canadian market rebounds from recent volatility, driven by easing inflation and positive economic data, investors are increasingly eyeing opportunities in undervalued small-cap stocks. In this favorable environment of potential rate cuts by the Bank of Canada, identifying small-cap companies with insider buying can be particularly promising for those looking to capitalize on market sentiment.

Top 10 Undervalued Small Caps With Insider Buying In Canada

Name	PE	PS	Discount to Fair Value	Value Rating
Calfrac Well Services	2.6x	0.2x	35.29%	★★★★★★
Nexus Industrial REIT	3.4x	3.4x	25.64%	★★★★★☆
Obsidian Energy	6.6x	1.0x	48.54%	★★★★★☆
Bragg Gaming Group	NA	1.2x	16.98%	★★★★★☆
Trican Well Service	8.0x	1.0x	7.09%	★★★★☆☆
Information Services	23.8x	2.1x	-66.04%	★★★★☆☆
Primaris Real Estate Investment Trust	10.9x	2.9x	45.81%	★★★★☆☆
Hemisphere Energy	6.8x	2.5x	13.42%	★★★☆☆☆
ADENTRA	16.3x	0.3x	10.51%	★★★☆☆☆
Sagicor Financial	1.3x	0.3x	-43.80%	★★★☆☆☆

Click here to see the full list of 26 stocks from our Undervalued TSX Small Caps With Insider Buying screener.

Let's take a closer look at a couple of our picks from the screened companies.

Centerra Gold (TSX:CG)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Centerra Gold is a mining company engaged in the exploration, development, and production of gold and copper with a market cap of approximately $2.33 billion.

Operations: Centerra Gold generates revenue primarily from its Öksüt, Molybdenum, and Mount Milligan segments. The company's net income margin has shown significant fluctuations, with a recent low of -0.34708% in Q2 2023 and a high of 0.49653% in Q4 2021. Gross profit margins have varied as well, reaching up to 58.82% in Q3 2019 but dropping to lows like 14.42% in Q1 2023.

PE: 11.5x

Centerra Gold, a Canadian small-cap, reported Q2 2024 sales of US$282.31 million and net income of US$37.67 million, reversing a loss from the previous year. For the first half of 2024, sales reached US$588.19 million with net income at US$104.1 million. The company repurchased 1,439,700 shares for $9.8 million in Q2 and announced a quarterly dividend of CAD0.07 per share payable on August 29th. Insider confidence is evident with recent share purchases in April-June 2024 worth $21.9 million

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

• Evaluate Centerra Gold's historical performance by accessing our past performance report.

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$0.84 billion.

Operations: Chemtrade Logistics Income Fund's revenue streams are primarily derived from its EC and SWC segments, totaling CA$1.78 billion. The company reported a gross profit of CA$397.45 million for the latest period, with a gross profit margin of 22.43%. Operating expenses were CA$147.04 million, while non-operating expenses amounted to CA$111.39 million.

PE: 8.3x

Chemtrade Logistics Income Fund, a small-cap Canadian stock, has seen insider confidence with share purchases in 2024. Despite reporting lower sales (C$448.1 million) and net income (C$14.6 million) for Q2 compared to last year, the company continues to declare monthly cash distributions of C$0.055 per unit. While earnings are forecasted to decline by 1% annually over the next three years, Chemtrade's consistent dividends may appeal to income-focused investors seeking undervalued opportunities in Canada’s market.

• Navigate through the intricacies of Chemtrade Logistics Income Fund with our comprehensive valuation report here.

• Understand Chemtrade Logistics Income Fund's track record by examining our Past report.

Exchange Income (TSX:EIF)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Exchange Income is a diversified company operating in the manufacturing and aerospace & aviation sectors with a market cap of CA$2.05 billion.

Operations: The company generates revenue from two primary segments: Manufacturing and Aerospace & Aviation. Over the observed periods, it has shown varying gross profit margins, reaching up to 39.36%. Operating expenses, including General & Administrative costs and D&A expenses, are significant components of its cost structure.

PE: 20.1x

Exchange Income Corporation, a Canadian small-cap stock, has shown promising financial performance despite some challenges. For the six months ending June 30, 2024, revenue reached C$1.26 billion compared to C$1.15 billion a year ago. However, net income slightly decreased to C$37.18 million from C$43.76 million last year. Insider confidence is evident with recent share purchases by executives in the past quarter. The company also declared consistent monthly dividends of C$0.22 per share for August and July 2024, highlighting its commitment to shareholder returns amidst growth prospects forecasted at 25% annually.

• Delve into the full analysis valuation report here for a deeper understanding of Exchange Income.

• Assess Exchange Income's past performance with our detailed historical performance reports.

Key Takeaways

• Unlock our comprehensive list of 26 Undervalued TSX Small Caps With Insider Buying by clicking here.
• Are you invested in these stocks already? Keep abreast of every twist and turn by setting up a portfolio with Simply Wall St, where we make it simple for investors like you to stay informed and proactive.
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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.

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