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The Canadian market has been navigating a period of economic moderation, with inflation rates stabilizing and the TSX showing modest gains of 3% this year. In this environment, small-cap stocks can offer unique opportunities for investors seeking growth potential, particularly when insider activity signals confidence in a company's prospects.
Top 10 Undervalued Small Caps With Insider Buying In Canada
| Name | PE | PS | Discount to Fair Value | Value Rating |
|---|---|---|---|---|
| First National Financial | 13.5x | 3.8x | 44.04% | ★★★★★☆ |
| Boston Pizza Royalties Income Fund | 11.8x | 7.6x | 34.06% | ★★★★★☆ |
| Nexus Industrial REIT | 11.9x | 3.0x | 23.52% | ★★★★★☆ |
| Baytex Energy | NA | 0.8x | -119.13% | ★★★★☆☆ |
| Bonterra Energy | 5.1x | 0.6x | 30.62% | ★★★★☆☆ |
| Parex Resources | 3.9x | 0.9x | -18.43% | ★★★☆☆☆ |
| Primaris Real Estate Investment Trust | 20.0x | 3.2x | 47.11% | ★★★☆☆☆ |
| Calfrac Well Services | 12.0x | 0.2x | -39.18% | ★★★☆☆☆ |
| Saturn Oil & Gas | 1.9x | 0.6x | -65.86% | ★★★☆☆☆ |
| Minto Apartment Real Estate Investment Trust | NA | 5.4x | 14.29% | ★★★☆☆☆ |
Here's a peek at a few of the choices from the screener.
Baytex Energy
Simply Wall St Value Rating: ★★★★☆☆
Overview: Baytex Energy is a Canadian company engaged in the exploration and production of oil and gas, with operations generating CA$3.36 billion in revenue.
Operations: The company generates revenue primarily from oil and gas exploration and production, with a recent gross profit margin of 68.54%. Costs include COGS at CA$1.06 billion and operating expenses at CA$2.35 billion for the latest period, impacting net income which stands at a loss of CA$350.76 million.
PE: -7.8x
Baytex Energy, a smaller Canadian energy player, is catching attention with its forecasted 30% annual earnings growth. The company recently announced a fixed-income offering with 7.375% senior unsecured notes due in 2032, highlighting their reliance on external funding. Production guidance for 2025 targets between 150,000 and 154,000 boe/d. Insider confidence is evident from recent share purchases within the past year. While risks exist due to funding strategies, growth potential remains significant in the energy sector's evolving landscape.
Flagship Communities Real Estate Investment Trust
Simply Wall St Value Rating: ★★★★★☆
Overview: Flagship Communities Real Estate Investment Trust focuses on owning and operating manufactured housing communities, with a market capitalization of approximately $0.51 billion.
Operations: Flagship Communities Real Estate Investment Trust generates revenue primarily from residential real estate investments, with a recent quarterly revenue of $83.14 million. The gross profit margin has shown some fluctuations, most recently recorded at 66.08%. Operating expenses are a significant cost factor, with general and administrative expenses reaching $10.29 million in the latest period.