Top 3 Undervalued Small Caps In Canada With Insider Action For July 2024

Over the last 7 days, the Canadian market has remained flat, yet it is up 11% over the past year with earnings forecasted to grow by 15% annually. In this context, identifying undervalued small-cap stocks with notable insider action can present compelling opportunities for investors looking to capitalize on potential growth.

Top 10 Undervalued Small Caps With Insider Buying In Canada

Name	PE	PS	Discount to Fair Value	Value Rating
Dundee Precious Metals	8.5x	2.9x	32.59%	★★★★★★
First National Financial	8.8x	3.0x	48.09%	★★★★★☆
Calfrac Well Services	2.3x	0.2x	28.64%	★★★★★☆
Bragg Gaming Group	NA	1.4x	22.87%	★★★★★☆
Nexus Industrial REIT	2.8x	3.4x	13.95%	★★★★☆☆
Guardian Capital Group	10.4x	4.0x	31.38%	★★★★☆☆
Sagicor Financial	1.1x	0.3x	-80.21%	★★★★☆☆
Primaris Real Estate Investment Trust	11.8x	3.1x	33.68%	★★★★☆☆
Hemisphere Energy	7.0x	2.5x	0.52%	★★★☆☆☆
AutoCanada	11.0x	0.1x	-92.75%	★★★☆☆☆

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 operates in the manufacturing and aerospace & aviation sectors with a market cap of CA$2.25 billion.

Operations: The company generates revenue primarily from its Manufacturing and Aerospace & Aviation segments, with recent figures showing $2.57 billion in total revenue. The gross profit margin has shown a general upward trend, reaching 34.55% as of the most recent period. Operating expenses and non-operating expenses are significant cost components, contributing to a net income of CA$119.97 million for the latest quarter.

PE: 19.3x

Exchange Income Corporation, a small-cap stock in Canada, has shown insider confidence with recent share purchases. Despite a slight dip in net income to C$4.53 million for Q1 2024 from C$6.86 million the previous year, revenue climbed to C$601.77 million from C$526.84 million. The company declared consistent monthly dividends of C$0.22 per share through mid-2024 and forecasts earnings growth of 22% annually, highlighting its potential for future value despite relying solely on external borrowing for funding.

• Unlock comprehensive insights into our analysis of Exchange Income stock in this valuation report.

• Understand Exchange Income's track record by examining our Past report.

Interfor (TSX:IFP)

Simply Wall St Value Rating: ★★★★★★

Overview: Interfor is a Canadian company engaged in the production and sale of lumber products, with a market cap of approximately CA$1.50 billion.

Operations: The company's revenue primarily comes from its Solid Wood segment, generating CA$3.30 billion. Key financial data indicates a gross profit margin of 0.03634% for the most recent period ending July 2024, with net income showing a loss of CA$298.40 million and operating expenses at CA$313.10 million.

PE: -3.1x

Interfor, a Canadian small-cap company, has shown insider confidence with recent share purchases by key executives. Despite reporting a net loss of C$72.9 million for Q1 2024 and sales dropping to C$813.2 million from the previous year's C$829.9 million, the company increased its lumber production to 1,069 million fbm from 1,031 million fbm year-over-year. With revenue forecasted to grow annually by 7.57%, Interfor's potential for growth remains noteworthy despite current financial challenges and reliance on external borrowing for funding.

• Click here to discover the nuances of Interfor with our detailed analytical valuation report.

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

Softchoice (TSX:SFTC)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Softchoice is a technology solutions provider specializing in IT infrastructure, software, and cloud services with a market cap of approximately C$1.04 billion.

Operations: Softchoice generates revenue primarily from direct marketing, with a recent gross profit margin of 41.82%. The company has seen fluctuations in its net income, achieving a net income margin of 5.21% as of the latest reporting period.

PE: 19.2x

Softchoice, a Canadian tech services provider, has shown insider confidence with recent share purchases by executives in the past six months. Despite reporting a net loss of US$1.03 million for Q1 2024 compared to a net income of US$4.54 million the previous year, they continue to distribute dividends and recently elected Martha Tory as a new director. The company forecasts earnings growth at 16.78% annually and maintains funding through external borrowing, highlighting its potential for future value appreciation despite current challenges.

• Navigate through the intricacies of Softchoice with our comprehensive valuation report here.

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

Taking Advantage

• Gain an insight into the universe of 29 Undervalued TSX Small Caps With Insider Buying by clicking here.
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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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