Discovering Hidden Gems: 3 Undervalued Small Caps With Insider Action On TSX In Canada

As the Canadian market continues to thrive, investors are actively seeking small-cap stocks with undervalued potential and insider action. By identifying such opportunities, investors can capitalize on favorable market conditions and benefit from the insights of insiders. This article explores three undervalued small-cap stocks on the TSX in Canada with notable insider action, highlighting their financial performance, insider activity, and future prospects.

1. Atrium Mortgage Investment (TSX:AI)
Atrium Mortgage Investment operates as a non-bank lender, providing residential and commercial mortgages. With a market capitalization of CA$0.49 billion, the company recently reported stable net income of CAD 11.61 million in Q3 2024, slightly up from last year. Insiders have been purchasing shares recently, indicating potential value recognition despite past shareholder dilution and fluctuating revenues. The company's steady earnings growth, projected at 7.12% annually, makes it an attractive investment opportunity.

2. Badger Infrastructure Solutions (TSX:BDGI)
Badger Infrastructure Solutions specializes in non-destructive excavating services, with a market capitalization of approximately $1.24 billion CAD. The company has shown steady financial performance with Q3 2024 sales at US$209.38 million, up from US$195.55 million the previous year. Despite this growth, net income remained stable at approximately US$23 million. Insider confidence is evident as they have been purchasing shares recently, suggesting potential optimism about future growth prospects amid forecasts of earnings increasing by 37% annually.

3. NorthWest Healthcare Properties Real Estate Investment Trust (TSX:NWH.UN)
NorthWest Healthcare Properties Real Estate Investment Trust focuses on owning and managing healthcare real estate properties, with a market cap of approximately CA$2.55 billion. The company recently saw insider confidence with Peter Aghar purchasing 100,000 shares worth C$477,861. Despite reporting a net loss and lower sales compared to last year, the REIT continues to pay monthly dividends of C$0.03 per unit. The earnings forecast suggests significant growth at 117.9% annually, although its funding relies entirely on higher-risk external borrowing.

Investing in undervalued small-cap stocks with insider action on the TSX in Canada can offer attractive opportunities for growth and value creation. By carefully evaluating the financial performance, insider activity, and future prospects of these companies, investors can make informed decisions and benefit from their undervalued status. As the market continues to evolve, staying informed and adaptable will be crucial for successfully navigating the investment landscape.