The Canadian market has shown impressive strength, increasing by 1.1% over the last week and up 20% over the past year, with earnings projected to grow by 15% annually in the coming years. In this favorable environment, identifying undervalued small-cap stocks with insider action can offer promising opportunities for investors looking to capitalize on potential growth.
Top 10 Undervalued Small Caps With Insider Buying In Canada
Overview: Centerra Gold is a mining company that operates gold and copper mines, with significant operations at its ?ksüt, Mount Milligan, and Molybdenum projects.
Operations: Centerra Gold derives its revenue primarily from ?ksüt ($603.31 million), Mount Milligan ($429.08 million), and Molybdenum ($239.65 million) segments. The company's cost of goods sold (COGS) was $734.39 million for the most recent period, resulting in a gross profit margin of 32.93%.
PE: 11.7x
Centerra Gold's recent performance highlights its potential among undervalued small caps in Canada. For Q2 2024, the company reported sales of US$282.31 million and net income of US$37.67 million, a notable turnaround from a net loss last year. The company repurchased 1,439,700 shares between April and June 2024 for US$9.8 million, reflecting insider confidence in its prospects. Despite earnings forecasted to decline by an average of 13.4% annually over the next three years, strategic plans for their U.S molybdenum operations could offer future growth opportunities.
Overview: Chemtrade Logistics Income Fund operates in the chemical industry, providing industrial chemicals and services with a market cap of approximately CA$0.83 billion.
Operations: Chemtrade Logistics Income Fund generates revenue primarily from its EC and SWC segments, with recent quarterly revenues reaching CA$1.77 billion. The company has experienced fluctuations in its gross profit margin, peaking at 23.63% in Q3 2023. Operating expenses have varied, most recently reported at CA$147.04 million for the same period.
PE: 9.0x
Chemtrade Logistics Income Fund, a smaller Canadian company, has recently demonstrated insider confidence with significant share purchases between May 15 and August 13, 2024. Despite a high debt level and declining earnings forecast of an average of 1.1% per year over the next three years, Chemtrade continues to distribute monthly dividends ($0.055/unit). The company completed a CAD 250 million fixed-income offering in August and repurchased 546,700 shares for CAD 5.08 million during the same period.
Overview: Vermilion Energy is an oil and gas exploration and production company with a market cap of CA$3.76 billion.
Operations: Vermilion Energy generates revenue primarily from oil and gas exploration and production, with a recent revenue figure of CA$1.81 billion. The company has experienced fluctuations in net income, with the latest reporting period showing a net loss of CA$825.95 million. Gross profit margin for the same period was 65.72%.
PE: -2.6x
Vermilion Energy, a Canadian small-cap, has shown promising developments in its operations. Recent insider confidence was demonstrated through share purchases in July 2024. The company completed testing of its first deep gas well in Germany with encouraging results and initiated drilling of a second well. In Croatia, production increased on the SA-10 block to over 2,000 boe/d following the commissioning of a new gas plant. Vermilion also repurchased 900,000 shares for CAD 13.2 million from July 8 to July 31, signaling strong operational performance and shareholder value focus.
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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:CG TSX:CHE.UN and TSX:VET.
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