The Canadian market has been navigating a complex landscape, with inflation easing and central banks signaling potential rate cuts. Amid these shifts, small-cap stocks have faced volatility but also present unique opportunities for investors seeking growth. In this context, identifying promising small-cap stocks can be particularly rewarding. Here are three undiscovered gems in Canada to watch this August 2024.

Top 10 Undiscovered Gems With Strong Fundamentals In Canada

Click here to see the full list of 44 stocks from our TSX Undiscovered Gems With Strong Fundamentals screener.

Here's a peek at a few of the choices from the screener.

Lassonde Industries

Simply Wall St Value Rating: ★★★★★★

Overview: Lassonde Industries Inc., with a market cap of CA$1.06 billion, develops, manufactures, and markets a range of ready-to-drink beverages, fruit-based snacks, and frozen juice concentrates in Canada, the United States, and internationally.

Operations: Lassonde Industries Inc. generates CA$2.34 billion in revenue from its non-alcoholic beverages segment. The company’s financial performance is significantly influenced by this primary revenue stream.

Lassonde Industries has shown impressive growth, with earnings surging 67.7% over the past year, outpacing the Food industry’s 16.7%. The company’s net debt to equity ratio stands at a satisfactory 16.8%, down from 48.3% five years ago, reflecting strong financial management. Recent expansions include a $53 million investment in a new beverage manufacturing facility and distribution center in North Carolina, enhancing production capacity and sustainability efforts while adding 30 full-time positions.

• Navigate through the intricacies of Lassonde Industries with our comprehensive health report here.

• Assess Lassonde Industries' past performance with our detailed historical performance reports.

Richards Packaging Income Fund

Simply Wall St Value Rating: ★★★★★★

Overview: Richards Packaging Income Fund, with a market cap of CA$348.92 million, designs, manufactures, and distributes packaging containers and healthcare supplies and products in North America.

Operations: Richards Packaging Income Fund generates revenue primarily from its wholesale segment, which amounted to CA$415.52 million. The company has a market cap of CA$348.92 million and operates in North America.

Richards Packaging Income Fund has shown resilience despite a challenging year, with earnings growth at -6.7%, outperforming the packaging industry average of -13%. Trading at 51.6% below its estimated fair value, it offers potential for value investors. The company’s net debt to equity ratio stands at a satisfactory 8.1%, having decreased from 53.8% over five years. Recent earnings reported CAD 11.8 million in net income for Q2, up from CAD 10.91 million last year, highlighting its strong financial footing and consistent dividend payouts of CAD 0.11 per unit monthly.

• Take a closer look at Richards Packaging Income Fund's potential here in our health report.

• Understand Richards Packaging Income Fund's track record by examining our Past report.

Westshore Terminals Investment

Simply Wall St Value Rating: ★★★★★☆

Overview: Westshore Terminals Investment Corporation operates a coal storage and unloading/loading terminal at Roberts Bank, British Columbia, with a market cap of CA$1.40 billion.

Operations: Westshore Terminals Investment generates revenue primarily from coal storage and terminal services. The company's net profit margin is 25%.

Westshore Terminals Investment Corporation, a notable player in the infrastructure sector, reported CAD 105.62 million in revenue for Q2 2024, up from CAD 93.02 million last year. Net income for the quarter was CAD 34.61 million compared to CAD 28.14 million previously, with basic earnings per share at CAD 0.56 versus CAD 0.45 a year ago. The company has no debt and boasts a price-to-earnings ratio of 13.6x, slightly below the Canadian market average of 13.7x.

• Get an in-depth perspective on Westshore Terminals Investment's performance by reading our health report here.

• Review our historical performance report to gain insights into Westshore Terminals Investment's's past performance.

Seize The Opportunity

• Click through to start exploring the rest of the 41 TSX Undiscovered Gems With Strong Fundamentals now.

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Interested In Other Possibilities?

• 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.

Companies discussed in this article include TSX:LAS.A TSX:RPI.UN and TSX:WTE.

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