Discovering Canada's Undiscovered Gems This September 2024

The Canadian market has experienced a slight downturn, with the TSX down about 3% amid a broader economic slowdown and softening labor market data. Despite these challenges, opportunities remain for discerning investors to uncover undervalued stocks that could offer substantial growth potential. In this article, we explore three undiscovered gems in Canada that stand out due to their strong fundamentals and resilience in the current market environment.

Top 10 Undiscovered Gems With Strong Fundamentals In Canada

Name

Debt To Equity

Revenue Growth

Earnings Growth

Health Rating

TWC Enterprises

6.74%

10.99%

25.68%

★★★★★★

Reconnaissance Energy Africa

NA

15.28%

7.58%

★★★★★★

Taiga Building Products

NA

6.05%

10.50%

★★★★★★

Amerigo Resources

12.87%

7.49%

12.97%

★★★★★☆

Tenaz Energy

NA

33.64%

50.62%

★★★★★☆

Mako Mining

22.90%

38.12%

54.79%

★★★★★☆

Firan Technology Group

17.91%

3.75%

23.32%

★★★★★☆

Pizza Pizza Royalty

15.66%

3.64%

3.95%

★★★★☆☆

Queen's Road Capital Investment

7.20%

22.14%

22.20%

★★★★☆☆

Genesis Land Development

53.32%

25.58%

47.05%

★★★★☆☆

Click here to see the full list of 45 stocks from our TSX Undiscovered Gems With Strong Fundamentals screener.

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

Extendicare

Simply Wall St Value Rating: ★★★★☆☆

Overview: Extendicare Inc., with a market cap of CA$742.86 million, operates through its subsidiaries to provide care and services for seniors in Canada.

Operations: Extendicare generates revenue primarily from Long-Term Care (CA$798.80 million), Home Health Care (CA$525.16 million), and Managed Services (CA$64.32 million).

Extendicare, a small cap Canadian healthcare provider, has shown impressive earnings growth of 3957.1% over the past year, far outpacing the industry average of 6%. The company's EBIT covers its interest payments 5.9 times over, indicating strong financial health despite a high net debt to equity ratio of 133.7%. With a price-to-earnings ratio at 12.8x compared to the broader market's 14.9x and consistent dividends (CAD$0.04 per share), Extendicare presents an intriguing investment opportunity in Canada’s healthcare sector.

TSX:EXE Earnings and Revenue Growth as at Sep 2024
TSX:EXE Earnings and Revenue Growth as at Sep 2024

North West

Simply Wall St Value Rating: ★★★★★★

Overview: The North West Company Inc., with a market cap of CA$2.47 billion, operates through its subsidiaries to retail food and everyday products and services in rural communities and urban neighborhood markets across northern Canada, rural Alaska, the South Pacific, and the Caribbean.