As the Canadian market continues to benefit from easing monetary policies and solid economic fundamentals, small-cap stocks on the TSX are gaining attention amid these supportive conditions. With insider buying often seen as a positive signal, exploring undervalued small caps can offer insights into potential opportunities in this dynamic environment.
Top 10 Undervalued Small Caps With Insider Buying In Canada
Overview: Primaris Real Estate Investment Trust focuses on the ownership, management, and development of its investment properties and has a market capitalization of CA$1.52 billion.
Operations: The company generates revenue primarily through the ownership, management, and development of its investment properties, with recent figures reaching CA$457.86 million. Gross profit margin has shown fluctuations over the periods observed, with a recent figure of 56.92%. Operating expenses have been consistently present, impacting overall profitability alongside notable non-operating expenses. The net income margin has varied significantly across different periods, reflecting changes in both operational efficiency and external financial factors.
PE: 13.4x
Primaris Real Estate Investment Trust, a Canadian player in the real estate sector, showcases potential for value with insider confidence reflected by a notable purchase of 20,000 shares valued at C$271,600 by an insider. Despite relying on higher-risk external borrowing and recent shareholder dilution from a C$69.59 million equity offering, Primaris maintains consistent dividends and has completed share repurchases worth C$15.64 million. Earnings are projected to grow annually by 22.15%, suggesting promising future prospects amidst its challenges.
Overview: Parex Resources is a company engaged in the exploration and production of oil and gas, with operations primarily focused in Colombia, and it has a market cap of approximately C$3.45 billion.
Operations: The company generates revenue primarily from oil and gas exploration and production, with a recent revenue figure of $1.16 billion. The cost of goods sold (COGS) was reported at $328.24 million, contributing to a gross profit margin of 71.63%. Operating expenses amounted to $329.40 million, impacting the net income margin which stood at 22.78%.
PE: 4.0x
Parex Resources, a small Canadian energy player, shows mixed signals for investors eyeing undervalued opportunities. Despite a dip in profit margins from 49.1% to 22.8% over the past year and forecasted earnings declines averaging 36.7% annually for three years, insider confidence is evident with Imad Mohsen acquiring 23,915 shares worth US$496,736 recently. The company repurchased 4.39% of its shares by November 2024 for US$63 million, reflecting strategic capital management amidst revenue and net income drops in Q3 compared to last year.
Overview: Trican Well Service is a company that provides oil well equipment and services, with operations generating approximately CA$960.24 million in revenue.
Operations: Trican Well Service's revenue primarily stems from oil well equipment and services, with a recent figure of CA$960.24 million. The company's gross profit margin has shown an upward trend, reaching 29.22% in mid-2023 before slightly decreasing to 27.37% by late 2024. Operating expenses and non-operating expenses are significant cost components impacting profitability, with general and administrative expenses consistently noted throughout the periods analyzed.
PE: 8.4x
Trican Well Service, a Canadian company in the energy sector, shows signs of being undervalued. Despite a decline in third-quarter sales to C$221.59 million and net income to C$24.48 million compared to last year, insider confidence is evident with their CFO purchasing 27,000 shares for approximately C$130,140 in October 2024. Additionally, the company has actively repurchased over 21 million shares for C$94.73 million since October 2023, indicating strategic capital management amidst forecasted earnings declines over the next three years.
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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:PMZ.UN TSX:PXT and TSX:TCW.
