Top Undervalued Small Caps In Canada With Insider Action For October 2024

The Canadian market has been riding a wave of optimism, with the TSX reaching all-time highs driven by positive economic indicators and central bank policies. As we navigate through this period of market enthusiasm, identifying undervalued small-cap stocks with insider action can offer unique opportunities for investors looking to capitalize on these favorable conditions.

Top 10 Undervalued Small Caps With Insider Buying In Canada

Name	PE	PS	Discount to Fair Value	Value Rating
Vermilion Energy	NA	1.1x	46.69%	★★★★★★
Trican Well Service	7.7x	0.9x	13.52%	★★★★★☆
Nexus Industrial REIT	3.7x	3.7x	21.50%	★★★★★☆
AutoCanada	NA	0.1x	48.74%	★★★★★☆
Rogers Sugar	15.5x	0.6x	47.90%	★★★★☆☆
Primaris Real Estate Investment Trust	12.8x	3.4x	45.09%	★★★★☆☆
Sagicor Financial	1.2x	0.3x	-32.06%	★★★★☆☆
Calfrac Well Services	2.4x	0.2x	-54.39%	★★★★☆☆
Hemisphere Energy	6.2x	2.4x	-223.23%	★★★☆☆☆
Metalla Royalty & Streaming	NA	59.0x	-6.18%	★★★☆☆☆

Click here to see the full list of 19 stocks from our Undervalued TSX Small Caps With Insider Buying screener.

We'll examine a selection from our screener results.

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 approximately CA$2.02 billion.

Operations: Exchange Income generates revenue primarily from its Manufacturing and Aerospace & Aviation segments, with the latter being the larger contributor. The company has seen fluctuations in its net income margin, which reached 0.04895% as of December 31, 2023. Operating expenses and cost of goods sold significantly impact gross profit margins, which stood at 34.72% for the same period.

PE: 21.1x

Exchange Income Corporation (EIC) stands out among undervalued small caps in Canada, with a solid financial position and forecasted earnings growth of 25.94% annually. Despite higher-risk funding sources, EIC maintains stability without shareholder dilution over the past year. Recent insider confidence is evident through share purchases from April to June 2024. The company’s commitment to community initiatives, like the Atik Mason Pilot Pathway for Indigenous students, underscores its strong operational ethos while paying consistent monthly dividends of C$0.22 per share.

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

• Examine Exchange Income's past performance report to understand how it has performed in the past.

NorthWest Healthcare Properties Real Estate Investment Trust (TSX:NWH.UN)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: NorthWest Healthcare Properties Real Estate Investment Trust specializes in owning and managing healthcare real estate properties with a market cap of approximately CA$2.75 billion.

Operations: NorthWest Healthcare Properties Real Estate Investment Trust generates revenue primarily from its healthcare real estate industry segment, which amounted to CA$523.85 million in the latest period. The company reported a gross profit margin of 77.81% as of September 30, 2024, with significant operating and non-operating expenses impacting net income.

PE: -3.6x

NorthWest Healthcare Properties Real Estate Investment Trust, a smaller Canadian stock, recently saw insider confidence with Peter Aghar purchasing 100,000 shares worth C$477,861. Despite reporting a net loss of C$122 million for Q2 2024 and lower sales compared to last year, the REIT continues to pay monthly dividends of C$0.03 per unit. The earnings forecast suggests significant growth at 117.9% annually, although its funding relies entirely on higher-risk external borrowing.

• Get an in-depth perspective on NorthWest Healthcare Properties Real Estate Investment Trust's performance by reading our valuation report here.

• Explore historical data to track NorthWest Healthcare Properties Real Estate Investment Trust's performance over time in our Past section.

Real Matters (TSX:REAL)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Real Matters operates as a network management services provider, primarily focusing on mortgage lending and insurance industries, with a market cap of approximately C$0.49 billion.

Operations: The company's revenue primarily comes from its U.S. Appraisal segment ($128.03 million), followed by Canada ($32.73 million) and U.S. Title ($8.53 million). The gross profit margin has shown fluctuations, with the highest at 36.17% in Q4 2020 and the lowest at 19.30% in Q3 2014, reflecting variations in cost management and operational efficiency over time.

PE: 276.7x

Real Matters, a Canadian small cap, recently reported third-quarter sales of US$49.49 million, up from US$45.95 million the previous year, with net income reaching US$1.7 million compared to a loss of US$0.619 million previously. Despite being dropped from the S&P Global BMI Index in September 2024, insider confidence remains high with significant share purchases over the past six months. The company’s earnings are forecasted to grow significantly at 168% annually, indicating potential for future value appreciation.

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

• Assess Real Matters' past performance with our detailed historical performance reports.

Turning Ideas Into Actions

• Investigate our full lineup of 19 Undervalued TSX Small Caps With Insider Buying right here.
• Are these companies part of your investment strategy? Use Simply Wall St to consolidate your holdings into a portfolio and gain insights with our comprehensive analysis tools.
• Unlock the power of informed investing with Simply Wall St, your free guide to navigating stock markets worldwide.

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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