The Canadian stock market has experienced notable volatility recently, with significant swings that ultimately resulted in modest changes for the week. Amid this fluctuating environment, identifying undervalued small-cap stocks with insider action can present unique opportunities for investors looking to navigate these turbulent times.

Top 10 Undervalued Small Caps With Insider Buying In Canada

Click here to see the full list of 28 stocks from our Undervalued TSX Small Caps With Insider Buying screener.

Here's a peek at a few of the choices from the screener.

Black Diamond Group

Simply Wall St Value Rating: ★★★★☆☆

Overview: Black Diamond Group provides workforce and modular space solutions, with a market cap of approximately CA$0.34 billion.

Operations: Black Diamond Group generates revenue primarily from Workforce Solutions (CA$188.39 million) and Modular Space Solutions (CA$201.58 million). The company has experienced fluctuations in its net income margin, with a recent figure of 7.78% as of June 30, 2024. Gross profit margin has varied over time, reaching 46.04% in the same period.

PE: 19.5x

Black Diamond Group, a Canadian small cap, reported Q2 2024 sales of C$95.47 million, up from C$91.14 million in the same period last year, with net income rising to C$7.5 million from C$4.57 million. The company declared a third-quarter dividend of C$0.03 per share and closed an asset purchase for 329 space rental units worth $20.45 million in cash on July 2, 2024. Insider confidence is evident with recent purchases by executives throughout the past year.

• Click here to discover the nuances of Black Diamond Group with our detailed analytical valuation report.

• Examine Black Diamond Group's past performance report to understand how it has performed in the past.

ADF Group

Simply Wall St Value Rating: ★★★★★☆

Overview: ADF Group specializes in the design and engineering of complex steel structures for the non-residential construction industry, with a market cap of CA$358.15 million.

Operations: ADF Group generates revenue primarily from the non-residential construction industry, with recent figures showing CA$358.15 million. The company has seen its gross profit margin reach 25.35% as of April 30, 2024, while net income for the same period was CA$47.52 million, resulting in a net income margin of 13.27%.

PE: 8.7x

ADF Group, a smaller Canadian company, reported solid first-quarter earnings for the period ending April 30, 2024. Sales jumped to C$107.4 million from C$80.27 million the previous year, while net income rose to C$15.27 million from C$5.37 million. Basic earnings per share increased to C$0.47 from C$0.16 year-over-year. The Board approved a dividend hike from $0.01 to $0.02 per share starting October 2024, reflecting confidence in future cash flows and profitability. In May 2024, ADF secured new contracts worth $90 million across Quebec, Western Canada, and the US Midwest—highlighting their expanding footprint in both industrial and public infrastructure sectors. Additionally, insiders have shown confidence by purchasing shares within the past six months. With fabrication plants in Terrebonne and Great Falls actively engaged in these projects, ADF's diversified project portfolio positions it well for sustained growth amid rising demand for industrial construction services.

• Click to explore a detailed breakdown of our findings in ADF Group's valuation report.

• Evaluate ADF Group's historical performance by accessing our past performance report.

Information Services

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Information Services provides registry operations, services, and technology solutions with a market cap of CA$0.42 billion.

Operations: The company generates revenue primarily from Services (CA$108.81 million), Registry Operations (CA$116.60 million), and Technology Solutions (CA$27.31 million). The gross profit margin has shown variability, with the most recent figure at 74.82%. Operating expenses and non-operating expenses significantly impact net income, which was CA$20.69 million for the latest period ending June 30, 2024.

PE: 23.4x

Information Services Corporation, a Canadian small cap, recently reported Q2 2024 earnings with sales of C$67.85 million and net income of C$10.32 million, showing growth from last year’s figures. Despite improved revenue, profit margins have declined from 13.6% to 8.8%. The company has forecasted a 25.45% annual earnings growth but faces challenges with high-risk funding sources and interest coverage issues. Insider confidence is evident through recent share purchases in the past six months, indicating potential future gains despite current financial constraints.

• Click here and access our complete valuation analysis report to understand the dynamics of Information Services.

• Review our historical performance report to gain insights into Information Services''s past performance.

Key Takeaways

• Access the full spectrum of 28 Undervalued TSX Small Caps With Insider Buying by clicking on this link.

• Are you invested in these stocks already? Keep abreast of every twist and turn by setting up a portfolio with Simply Wall St, where we make it simple for investors like you to stay informed and proactive.

• Discover a world of investment opportunities with Simply Wall St's free app and access unparalleled stock analysis across all markets.

Looking For Alternative Opportunities?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.

• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

• Find companies with promising cash flow potential yet trading below their fair value.

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:BDI TSX:DRX and TSX:ISV.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]