The Canadian stock market has experienced notable volatility recently, with significant daily swings ultimately resulting in modest weekly changes. In this volatile environment, identifying promising small-cap stocks can provide unique opportunities for investors willing to ride out the ups and downs. The discovery of Hammond Power Solutions and two other hidden Canadian small-cap stocks could provide valuable insight into potential growth areas within this dynamic market.
Top 10 undiscovered gems with strong fundamentals in Canada
|
name |
Debt to equity |
Sales growth |
Profit growth |
Health assessment |
|---|---|---|---|---|
|
TWC Companies |
6.74% |
10.99% |
25.68% |
★★★★★★ |
|
Taiga Building Products |
N/A |
7.62% |
15.46% |
★★★★★★ |
|
Amerigo Resources |
12.87% |
7.49% |
12.97% |
★★★★★☆ |
|
Tenaz Energy |
N/A |
33.64% |
50.62% |
★★★★★☆ |
|
Enlightenment Energy Africa |
N/A |
31.73% |
-6.92% |
★★★★★☆ |
|
Mako Mining |
28.08% |
39.01% |
48.79% |
★★★★★☆ |
|
Firan Technology Group |
17.91% |
3.75% |
23.32% |
★★★★★☆ |
|
PizzasPizzas |
15.66% |
3.64% |
3.95% |
★★★★☆☆ |
|
Queen’s Road Capital Investments |
7.20% |
22.14% |
22.20% |
★★★★☆☆ |
|
Genesis Land Development |
53.32% |
25.58% |
47.05% |
★★★★☆☆ |
Click here to see the full list of 43 stocks from our TSX Undiscovered Gems With Strong Fundamentals screener.
Below we present a selection of stocks that our filter has filtered out.
Simply Wall St Value Rating: ★★★★★★
Overview: Hammond Power Solutions Inc., together with its subsidiaries, designs, manufactures and sells a variety of transformers in Canada, the United States, Mexico and India with a market capitalization of $1.35 billion Canadian.
Operations: Hammond Power Solutions’ revenues primarily come from the manufacture and sale of transformers and amount to 754.37 million Canadian dollars.
Hammond Power Solutions, a small-cap player in the electrical industry, has been performing solidly. Last year, earnings grew 12.3%, outperforming the industry average of 7.2%. The company reported second-quarter revenue of 197.21 million Canadian dollars and net income of 23.59 million Canadian dollars, up from 172.45 million Canadian dollars and 13.33 million Canadian dollars, respectively, a year ago. Trading at 51% below estimated fair value and reducing leverage from 27% to 5% over five years, the company appears undervalued and has strong growth potential ahead.
Simply Wall St Value Rating: ★★★★★★
Overview: Lassonde Industries Inc., together with its subsidiaries, develops, manufactures and markets a variety of ready-to-drink beverages, fruit snacks and frozen juice concentrates in Canada, the United States and internationally; the company has a market capitalization of $1.15 billion Canadian.
Operations: Lassonde Industries generates its revenue primarily through the sale of ready-to-drink beverages, fruit snacks and frozen juice concentrates in Canada, the United States and internationally. The company has a market capitalization of 1.15 billion Canadian dollars.
Lassonde Industries has shown impressive earnings growth of 53.4% over the past year, outperforming the food industry at 34.8%. Its debt-to-equity ratio has reduced significantly from 50.2% to 19.9% in five years, indicating better financial health. Lassonde trades at a significant discount of 71.6% to its estimated fair value and also reported revenue of CAD$624.67 million and net income of CAD$33.52 million in the second quarter, indicating strong performance and potential for future growth with the recent Hendersonville plant expansion.
Simply Wall St Value Rating: ★★★★☆☆
Overview: Peyto Exploration & Development Corp. is an energy company focused on the exploration, development and production of natural gas, oil and natural gas liquids in Alberta’s Deep Basin with a market capitalization of C$2.73 billion.
Operations: Peyto’s revenues primarily come from the oil and gas exploration and production segment and amount to C$876.26 million. The company has a market capitalization of C$2.73 billion.
Peyto Exploration & Development, a small-cap energy company, has demonstrated robust financial health, with its interest payments well covered by EBIT of 7x. Despite a high net debt to equity ratio of 49.2%, the company has reduced this from 72% over the past five years. Peyto trades 74.2% below estimated fair value and offers good relative value potential compared to peers. Recent results showed net income of CAD$99.88 million for Q1 2024, alongside natural gas production of 647,234 mcf/d and NGL production of 17,145 bbl/d.
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This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.
Companies discussed in this article include TSX:HPS.A, TSX:LAS.A and TSX:PEY.
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