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Highlights
- Small-cap stocks, generally cheaper than mid-cap and bluechip stocks, often attract new and amateur investors.
- Certain small-cap stocks have the capabilities to grow their business in the long term, which makes them ideal to invest in.
- An oil and gas stock mentioned here has zoomed by about 800 per cent in the last 12 months.
Small-cap stocks, generally cheaper than mid-cap and bluechip stocks, often attract new and amateur investors.
However, these stocks belong to companies with smaller market cap and are often newly established, making them a comparatively riskier investment option.
But that does not mean small-cap stocks can never fetch healthy returns over a period of time, as some small-cap companies have the capabilities to grow their business in the long run.
So, let us have a look at two Canadian small-cap stocks that saw notable recent performances.
Also read: 5 TSX tech stocks to jazz up your investment portfolio
1. Athabasca Oil Corporation (TSX:ATH)
Athabasca Oil Corporation, a Calgary-based oil and gas producer, saw its stock close at C$ 1.26 apiece on Wednesday, November 17. It was one of the top trading stocks with 10-day average trading volumes of 7.9 million shares.
Athabasca stock jumped by more than 77 per cent in the last three months. Over the past nine months, it soared by more than 196 per cent.
ATH stock also delivered a return of about 800 per cent over the last 12 months.
Image source: © 2021 Kalkine Media Inc
Athabasca produced approximately 34,250 barrels of oil equivalent per day (boe/d) in third quarter of FY2021. The total production included around 26,700 boe/d of thermal oil and some 7,500 boe/d of light oil.
Its operating income was C$ 121 million in this quarter, which was mainly due to high oil prices and 90 per cent liquid weighting.
As of November 18, ATH has a price-to-earnings (P/E) ratio of 33 and a return on equity (ROE) of 2.70 per cent.
2. American Lithium Corp (TSXV: LI)
Canadian lithium exploration and development company American Lithium Corp saw its stock close at C$ 5.78 apiece on November 17. It soared by almost 22 per cent in the last week and climbed by nearly 256 per cent in the last three months.
Also read: CGI (GIB.A) posts $346M Q4 profit. An under-the-radar tech stock to buy?
LI stock also zoomed by about 416 per cent in the past 12 months and swelled by roughly 374 per cent this year.
On the valuation front, it held market capitalization of C$ 1 billion, a price-to-book ratio of 7.918 and a debt-to-equity (D/E) ratio of 0.01 as of November 18. Its 10-day average trading volume stood at 2.1 million.
Bottom line
Canadian bourses have a wide range of small-cap stocks to choose from, but investors should ideally keep in mind that it is critical to evaluate the growth capabilities, fundamental and financials of a firm before investing.
