Yahoo Finance Exchange Income And 2 Other Undervalued Small Caps With Insider Action In Canada
Amidst a backdrop of cautious interest rate cuts by the Bank of Canada and a pause from the Federal Reserve, Canadian small-cap stocks find themselves in a complex economic landscape marked by consumer fatigue and uneven wealth distribution. Despite these challenges, rising stock market values and resilient consumer spending continue to support economic expansion, setting an intriguing stage for investors looking at undervalued opportunities in this segment. In such an environment, identifying small-cap stocks that are not only undervalued but also exhibit positive insider actions could provide potential resilience and growth prospects against broader market uncertainties.
Top 10 Undervalued Small Caps With Insider Buying In Canada
Name | PE | PS | Discount to Fair Value | Value Rating |
|---|---|---|---|---|
Dundee Precious Metals | 8.0x | 2.7x | 47.65% | ★★★★★☆ |
Nexus Industrial REIT | 2.4x | 3.0x | 17.97% | ★★★★★☆ |
Calfrac Well Services | 2.3x | 0.2x | 1.56% | ★★★★★☆ |
Primaris Real Estate Investment Trust | 11.1x | 2.9x | 36.10% | ★★★★★☆ |
Russel Metals | 9.2x | 0.5x | 13.28% | ★★★★☆☆ |
Guardian Capital Group | 10.6x | 4.1x | 31.07% | ★★★★☆☆ |
Sagicor Financial | 1.2x | 0.4x | -95.19% | ★★★★☆☆ |
Hemisphere Energy | 6.7x | 2.4x | 2.77% | ★★★☆☆☆ |
Bragg Gaming Group | NA | 1.4x | 18.13% | ★★★☆☆☆ |
Freehold Royalties | 15.3x | 6.6x | 47.37% | ★★★☆☆☆ |
Let's review some notable picks from our screened stocks.
Exchange Income
Simply Wall St Value Rating: ★★★★☆☆
Overview: Exchange Income is a diversified corporation operating primarily in the manufacturing and aerospace & aviation sectors, with a market capitalization of approximately CA$1.60 billion.
Operations: The company's gross profit margin has shown fluctuations over several periods, with a recent figure of 34.55% in the latest quarter ending March 2024. This indicates a slight increase from the previous year's same quarter, which recorded a gross profit margin of 34.46%.
PE: 18.1x
Exchange Income, a lesser-known entity in the Canadian market, recently showcased its financial resilience with a consistent dividend payout of CA$0.22 per share across recent months, reflecting stable cash flow despite slightly reduced net income from CA$6.86 million to CA$4.53 million year-over-year in the first quarter of 2024. Insider confidence was bolstered as they recently purchased shares, signaling trust in the company's prospects amidst forecasts predicting earnings growth of 22.72% annually. This blend of insider activity and solid financial performance positions Exchange Income attractively for discerning investors looking for overlooked opportunities in the market.
Navigate through the intricacies of Exchange Income with our comprehensive valuation report here.
Evaluate Exchange Income's historical performance by accessing our past performance report.
Hammond Power Solutions
Simply Wall St Value Rating: ★★★☆☆☆
Overview: Hammond Power Solutions specializes in the manufacture and sale of transformers, with a market capitalization of approximately CA$729.61 million.
Operations: The company generates revenue primarily through the manufacture and sale of transformers, with a recent recorded revenue of CA$729.61 million. Over time, it has experienced a gross profit margin increase, reaching 32.49% in the latest period reported.
PE: 23.6x
Hammond Power Solutions, a notable player in its industry, recently filed a Shelf Registration and reported a significant increase in annual sales to CAD 710.06 million, up from CAD 558.46 million the previous year. Despite a dip in quarterly net income to CAD 7.95 million from last year's CAD 15.73 million, insider confidence remains strong as evidenced by recent share purchases by insiders, signaling their belief in the company’s potential growth and stability. With an earnings forecast projecting an annual growth of nearly 18.59%, Hammond Power Solutions showcases promising prospects amidst its funding strategy reliant solely on external borrowing—a testament to its strategic financial maneuvers within the competitive landscape.
Take a closer look at Hammond Power Solutions' potential here in our valuation report.
Assess Hammond Power Solutions' past performance with our detailed historical performance reports.
Russel Metals
Simply Wall St Value Rating: ★★★★☆☆
Overview: Russel Metals is a company involved in metal distribution and processing, operating primarily through its Metals Service Centers, Energy Products, and Steel Distributors segments with a market capitalization of approximately CA$1.54 billion.
Operations: The company generates the majority of its revenue from Metals Service Centers, contributing CA$2.95 billion, followed by Energy Field Stores and Steel Distributors with CA$982.20 million and CA$429 million respectively. Its gross profit margin has shown an upward trend, reaching 0.213% in the most recent quarter from a lower percentage previously.
PE: 9.2x
Recently, Russel Metals demonstrated insider confidence with a notable purchase of 300,000 shares for CA$15 million. This move aligns with the company's strategic expansion, including the acquisition of seven service centers from Samuel, set to finalize in Q3 2024. Despite a dip in Q1 sales to CA$1.06 billion and net income falling to CA$49.7 million from higher levels last year, the firm raised its quarterly dividend by 5% to $0.42 per share and redeemed all outstanding senior unsecured notes using its robust cash reserves of CA$629 million. These actions underscore a proactive management approach amidst challenging market conditions.
Click here to discover the nuances of Russel Metals with our detailed analytical valuation report.
Gain insights into Russel Metals' historical performance by reviewing our past performance report.
Next Steps
Delve into our full catalog of 31 Undervalued TSX Small Caps With Insider Buying here.
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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:EIF TSX:HPS.A and TSX:RUS.
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