The Canadian stock market has experienced notable volatility in 2024, with significant swings that have left investors on edge. Despite these fluctuations, identifying undervalued small-cap stocks with insider buying can offer potential opportunities for those looking to navigate the current market conditions effectively.
Top 10 Undervalued Small Caps With Insider Buying In Canada
Overview: Black Diamond Group provides workforce accommodation and modular space solutions, with a market cap of CA$0.29 billion.
Operations: Black Diamond Group generates revenue primarily from Workforce Solutions (CA$188.39 million) and Modular Space Solutions (CA$201.58 million). The company's cost of goods sold (COGS) and operating expenses are significant, with COGS reaching up to CA$219.05 million in recent periods. Notably, the net income margin has seen fluctuations, reaching 8.41% as of September 30, 2023.
PE: 19.8x
Black Diamond Group, a small-cap Canadian company, reported a second-quarter sales increase to C$95.47 million from C$91.14 million last year, with net income rising to C$7.5 million from C$4.57 million. They declared a Q3 2024 dividend of C$0.03 and closed an asset purchase for 329 space rental units worth $20.45 million in Kitimat, BC, funded through existing lending facilities. Insider confidence was shown by recent share purchases over the past six months, reflecting potential growth in their modular space solutions market amidst healthy demand in Western Canada.
Overview: Centerra Gold is a Canadian-based gold mining and exploration company with operations primarily in North America and Asia, boasting a market cap of approximately C$2.02 billion.
Operations: Centerra Gold generates revenue primarily from its ?ksüt, Molybdenum, and Mount Milligan segments. The company has experienced fluctuations in its net income margin, with a notable trend of negative margins in recent periods, such as -0.34708% for the quarter ending June 30, 2023. Gross profit margins have also varied significantly over time, reaching as high as 58.82% in Q3 2019 but dropping to 14.42% by Q1 2023.
PE: 10.9x
Centerra Gold, a Canadian small cap, recently reported strong Q2 2024 earnings with sales of US$282.31 million and net income of US$37.67 million, reversing last year's losses. The company announced a quarterly dividend of CAD 0.07 per share and has provided production guidance for the year, expecting gold output between 370–410 koz. Additionally, insider confidence is reflected in recent share purchases by executives this year, suggesting optimism about future performance despite forecasted earnings decline over the next three years.
Overview: MDA Space is a Canadian company specializing in space technology and services, with operations spanning satellite systems, robotics, and geointelligence, and it has a market cap of approximately CA$0.92 billion.
Operations: The company generates revenue primarily from its core operations, with significant costs attributed to cost of goods sold (COGS) and operating expenses. Notably, the net income margin has fluctuated, reaching 6.97% as of Q2 2023.
PE: 36.4x
MDA Space, a player in the Canadian space technology sector, has seen significant insider confidence with Independent Chairman Brendan Paddick purchasing 85,000 shares worth C$1.02 million recently. The company reported strong Q2 2024 results with sales of C$242 million and net income of C$11 million. Additionally, MDA raised its full-year revenue guidance to between $1.02 billion and $1.06 billion for 2024, reflecting robust growth prospects driven by substantial contracts like the C$1 billion Canadarm3 program from the Canadian Space Agency.
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:BDI TSX:CG and TSX:MDA.
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