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Cascades And 2 Other Canadian Undervalued Small Caps With Insider Buying

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The Canadian market has experienced notable volatility in recent months, with a near 5% pullback in August followed by a strong recovery supported by an expanding economy and positive earnings growth. As the focus shifts from inflation to growth, investors are increasingly looking at undervalued small-cap stocks that could benefit from these evolving conditions. In this article, we will explore Cascades and two other Canadian small-cap companies that have shown promise through insider buying and potential for value appreciation amidst the current market landscape.

Top 10 Undervalued Small Caps With Insider Buying In Canada

Name

PE

PS

Discount to Fair Value

Value Rating

Calfrac Well Services

2.5x

0.2x

37.69%

★★★★★★

Trican Well Service

7.6x

0.9x

13.44%

★★★★★☆

Nexus Industrial REIT

3.6x

3.6x

23.11%

★★★★★☆

Rogers Sugar

15.1x

0.6x

49.19%

★★★★★☆

Flagship Communities Real Estate Investment Trust

3.6x

3.7x

46.21%

★★★★★☆

VersaBank

9.7x

4.0x

14.09%

★★★★☆☆

Goodfellow

9.1x

0.2x

22.54%

★★★★☆☆

Hemisphere Energy

5.7x

2.2x

14.87%

★★★★☆☆

Sagicor Financial

1.3x

0.3x

-41.33%

★★★★☆☆

Primaris Real Estate Investment Trust

11.8x

3.2x

42.36%

★★★★☆☆

Click here to see the full list of 23 stocks from our Undervalued TSX Small Caps With Insider Buying screener.

Below we spotlight a couple of our favorites from our exclusive screener.

Cascades

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Cascades operates in the production and sale of tissue papers, containerboard packaging products, specialty packaging products, and engages in corporate recovery and recycling activities with a market cap of CA$1.12 billion.

Operations: The company generates revenue primarily from Tissue Papers (CA$1.58 billion), Packaging Products - Containerboard (CA$2.30 billion), and Packaging Products - Specialty Products (CA$644 million). The gross profit margin has shown variability, with a recent value of 35.83% as of September 2023.

PE: -22.2x

Cascades, a Canadian small-cap stock, shows potential for investors seeking undervalued opportunities. Recent insider confidence is evident with Alain Lemaire purchasing 26,500 shares valued at C$255,135 in August 2024. Despite a net loss of C$19 million for the first half of 2024 and challenges in the Tissue Papers segment due to higher pulp prices, Cascades expects improved results from Containerboard and Specialty Packaging. The company declared a quarterly dividend of C$0.12 per share on September 5, 2024.

TSX:CAS Ownership Breakdown as at Sep 2024
TSX:CAS Ownership Breakdown as at Sep 2024

Flagship Communities Real Estate Investment Trust

Simply Wall St Value Rating: ★★★★★☆