Over the last 7 days, the Canadian market has dropped 2.3%, but it remains up 12% over the past year, with earnings expected to grow by 15% annually. In this context, identifying small-cap stocks with insider buying can be a promising strategy for investors looking to capitalize on potential undervaluation and future growth opportunities.
Top 10 Undervalued Small Caps With Insider Buying In Canada
Overview: Flagship Communities Real Estate Investment Trust operates in the residential REIT sector, focusing on manufactured housing communities with a market cap of approximately $0.51 billion (CAD).
Operations: Flagship Communities Real Estate Investment Trust generates revenue primarily from its residential REIT segment. The company reported a gross profit margin of 66.12% as of the most recent period ending September 8, 2024. Operating expenses include general and administrative costs, which were $9.68 million for the same period.
PE: 3.6x
Flagship Communities Real Estate Investment Trust, a smaller player in the Canadian market, has shown significant growth with Q2 2024 sales of US$21.23 million, up from US$17.38 million last year. Net income surged to US$43.46 million from US$21.39 million, reflecting strong operational performance despite forecasted earnings decline of 46.1% annually over the next three years. Insider confidence is evident with recent share purchases in August 2024, signaling potential value recognition within the company’s current undervaluation context.
Overview: Nexus Industrial REIT is a Canadian real estate investment trust focused on owning and managing industrial properties, with a market cap of approximately CA$1.14 billion.
Operations: Nexus Industrial REIT generates revenue primarily from investment properties, reporting CA$167.21 million in the latest period. The gross profit margin stood at 71.56%, with operating expenses amounting to CA$8.65 million and non-operating expenses at -CA$55.27 million, resulting in a net income of CA$166.29 million and a net income margin of 99.45%.
PE: 3.6x
Nexus Industrial REIT reported CAD 43.91 million in Q2 sales, up from CAD 38.42 million last year, but net income dropped to CAD 43.53 million from CAD 77.22 million. For the first half of 2024, sales rose to CAD 85.51 million while net income reached CAD 87.2 million compared to last year's figures of CAD 75.9 and CAD 80.94 respectively. Insider confidence is evident with significant share purchases over the past six months, signaling potential undervaluation despite forecasted earnings decline by an average of 46% annually for the next three years.
Overview: Rogers Sugar operates in the production and distribution of sugar and maple products, with a market cap of CA$0.52 billion.
Operations: Rogers Sugar generates revenue primarily from its sugar and maple products segments, with recent revenues totaling CA$1.21 billion. The company's gross profit margin has shown variability, reaching 21.42% in July 2016 and most recently recorded at 13.87% in June 2024.
PE: 15.3x
Rogers Sugar, a notable player in the Canadian market, recently reported Q3 2024 earnings with sales rising to C$309.09 million from C$262.29 million last year. However, net income fell to C$7.38 million from C$14.18 million due to higher operational costs and diluted earnings per share dropped to C$0.06 from C$0.12 a year ago. Despite this, insider confidence is evident as they made significant stock purchases in the past six months, indicating potential future growth opportunities for this undervalued small cap stock in Canada’s food industry sector.
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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.
Companies discussed in this article include TSX:MHC.UN TSX:NXR.UN and TSX:RSI.
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