Insider Buying Backs These 3 Undervalued Small Caps In Canada #CanadaFinance
CashNews.co
As the Canadian economy shows signs of slowing and central banks continue their rate-cutting cycles, small-cap stocks are garnering attention for their potential resilience in a cooling labor market. In this environment, identifying small-cap companies with strong fundamentals and insider buying activity can be particularly compelling, as these factors may signal confidence from those closest to the business.
Name
PE
PS
Discount to Fair Value
Value Rating
Trican Well Service
7.8x
0.9x
20.68%
★★★★★★
AutoCanada
THAT
0.1x
40.52%
★★★★★★
Calfrac Well Services
2.5x
0.2x
18.41%
★★★★★☆
Rogers Sugar
15.2x
0.6x
48.82%
★★★★☆☆
Nexus Industrial REIT
3.5x
3.5x
19.89%
★★★★☆☆
First National Financial
13.7x
3.9x
42.78%
★★★★☆☆
Primaris Real Estate Investment Trust
12.9x
3.4x
46.36%
★★★★☆☆
Sagicor Financial
1.3x
0.3x
-41.14%
★★★★☆☆
Vermilion Energy
THAT
1.1x
-217.85%
★★★★☆☆
Hemisphere Energy
6.1x
2.3x
-219.94%
★★★☆☆☆
Click here to see the full list of 23 stocks from our Undervalued TSX Small Caps With Insider Buying screener.
Here we highlight a subset of our preferred stocks from the screener.
Simply Wall St Value Rating: ★★★★☆☆
Overview: First National Financial operates as a mortgage lender in Canada, focusing on commercial and residential segments, with a market cap of CA$2.72 billion.
Operations: The company generates revenue primarily from its residential and commercial segments, with recent figures indicating a total revenue of CA$772.21 million. The gross profit margin has shown an upward trend, reaching 86.04% in the latest period. Operating expenses are significant, with general and administrative expenses being a major component at CA$221.12 million in the most recent quarter.
PE: 13.7x
First National Financial, a Canadian company with a smaller market presence, is attracting attention due to insider confidence shown by Stephen J. Smith’s purchase of 128,614 shares valued at C$4.86 million in the past year. Despite recent declines in quarterly net income to C$36.41 million from C$83.63 million last year, the company has increased its regular dividend and announced a special dividend of $0.50 per share for December 2024, indicating potential value for investors seeking income growth opportunities amidst financial challenges.
TSX:FN Share price vs Value as at Nov 2024
Simply Wall St Value Rating: ★★★★★★
Overview: Trican Well Service operates in the oilfield services industry, providing equipment and services for oil well operations, with a market capitalization of CA$1.14 billion.
Operations: The company generates revenue primarily from its oil well equipment and services segment, with recent revenues reaching CA$960.24 million. The gross profit margin has shown an upward trend, peaking at 29.22% in June 2023 before slightly decreasing to 27.37% by September 2024. Operating expenses have remained relatively consistent around CA$115 million to CA$116 million over the past few periods, impacting net income margins which have ranged between approximately 11% and 12%.
PE: 7.8x
Trican Well Service, a Canadian company with a focus on oilfield services, recently reported third-quarter sales of C$221.59 million, down from C$252.5 million the previous year. Despite declining earnings forecasts and reliance on external borrowing for funding, insider confidence is evident as Scott Matson increased their shareholding by 27,000 shares valued at approximately C$130K in October 2024. The company actively repurchased over 21 million shares for C$94.7 million under its buyback program to enhance shareholder value amidst these challenges.
TSX:TCW Share price vs Value as at Nov 2024
Simply Wall St Value Rating: ★★★☆☆☆
Overview: Tamarack Valley Energy is an oil and gas company focused on exploration and production, with a market capitalization of approximately CA$2.45 billion.
Operations: Tamarack Valley Energy generates revenue primarily from oil and gas exploration and production, with a recent quarterly revenue of CA$1.40 billion. The company’s cost of goods sold (COGS) was CA$325.38 million, resulting in a gross profit margin of 76.81%. Operating expenses were recorded at CA$614.02 million, impacting the net income margin which stood at 15.19%.
PE: 10.6x
Tamarack Valley Energy, a Canadian energy company, showcases potential as an undervalued stock despite forecasts of a 14% annual decline in earnings over the next three years. Recent financials highlight strong third-quarter performance with net income soaring to C$93.69 million from C$8.63 million the previous year. Insider confidence is evident through recent share purchases, indicating belief in future growth prospects. Regular monthly dividends of C$0.0125 per share further reflect stable shareholder returns amidst industry challenges.
TSX:TVE Share price vs Value as at Nov 2024
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.
Companies discussed in this article include TSX:FN TSX:TCW and TSX:TVE.
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