- One of the fintech companies mentioned here mined 553 bitcoins in its latest quarter.
- One of the companies in this article signed a research agreement with the University of Miami to treat type 1 diabetes.
- Among them, a mining company produced battery-grade lithium with 99.9 per cent purity
Small-cap stocks are believed to favor investors seeking a faster-growing company, yet these stock prices are generally traded at lower price points than large-cap stocks. Investors are observant while investing in these promising small-cap stocks, considering the reward-to-risk ratio and volatility of the stock price before investing and adding them to their portfolio for long-term goals.
While the S&P/TSX 60 index posted a year-to-date (YTD) return of 19.04 per cent, the highest YTD return posted by one of these small-cap stocks was 277.4 per cent.
Let us explore some of these small-cap stocks for long-term goals.
- Mullen Group Ltd. (TSX: MTL)
The company is an established transportation company that caters to logistics and trucking services in Canada. Some of its range of services include warehousing and specialized and oversized transportation.
Mullen Group held a market cap of C$ 1.29 billion on September 17, and on September 15, it paid a monthly dividend of C$ 0.04 per share. The dividend yield was 3.56 per cent on September 17.
The stock price of Mullen Group traded 52 per cent above its 52-week low of 8.84 (October 30, 2020) and closed at C$ 13.48 apiece on September 16. It returned close to 42 per cent over the past year.
In the second quarter of the fiscal year 2021, Mullen Group posted total revenue of C$ 312.5 million, up 21.4 per cent Year-over-Year (YoY). Its net income in the same quarter was C$ 21.7 million.
The transportation company posted a return on equity (ROE) of 8.04 per cent, earnings per share (EPS) of 0.75, and return on assets (ROA) of 3.99 per cent on September 17.
- Hut 8 Mining Corp. (TSX: HUT)
The asset mining or the fintech company focuses and prioritizes the mining of bitcoins, and the operations of the fintech company are located in Alberta. Along with holding bitcoins, Hut 8 Mining also is paving its way to building a diversified business.
Hut 8 Mining posted a record total revenue of C$ 33.54 million in Q2 FY21, up from C$ 9.23 million in Q2 FY20. It mined 553 bitcoins in Q2 FY21.
The mining company also launched many environmental, social, and governance activities to control the waste volumes.
The stock price return skyrocketed by a whopping 1,055 per cent over the past year. On September 16, it traded 1,326 per cent above its 52-week low of C$ 0.81 (September 21, 2020) to close at C$ 11.55 on September 16.
The fintech scrip held a market cap of C$ 1.66 billion and posted an ROE of 21.37 per cent, ROA of 19.22 per cent on September 17.
- Sernova Corp. (TSXV: SVA)
Sernova is a healthcare company in the clinical stage of developing a cure specifically for type 1 diabetes and other diseases. As per the latest press release, Sernova Corp. collaborated and signed a research agreement with the University of Miami to strengthen the research on Cell PouchTM.
The company held a price-to-book (P/B) ratio of 11.5 and a market cap of C$ 359.72 million on September 17.
The one-year stock return of Sernova was 401 per cent, and in the last nine months, the stock price spiked up by 254 per cent. It closed at C$ 1.38 on September 16.
Also Read: Best small stocks to Buy in Q3
- Birchcliff Energy Ltd (TSX: BIR)
This oil and gas company explores and produces natural gas and liquids and other oil and gas products. Birchcliff Energy, on October 1, will issue a quarterly dividend of C$ 0.005. The dividend yield was 0.29 per cent (at the time of writing).
The oil and gas scrip posted a debt-to-equity (D/E) ratio of 0.44, ROE of 5.61 per cent, and ROA of 3.05 per cent on September 17. On this date, the market cap of the company was C$ 1.78 billion
On a YTD basis, the stock price of Birchcliff Energy climbed up by 277 per cent and by 295 per cent over the past year. The stock price was C$ 6.68 apiece at the market close on September 16.
In Q1 FY21, the average production posted by Birchcliff Energy was 75,065 barrels of oil equivalent per day (boe/d). Its net income to common shareholders was C$ 22.2 million in Q1 FY21.
- Neo Lithium Corp. (TSXV: NLC)
This metal and mining company explores and develops resource-based projects and mining properties. Neo Lithium operates in both Canada and Argentina. The company held outstanding shares of 141.34 million and a market cap of C$ 675.62 million (at the time of writing)
One of its core projects, the 3Q project, develops high-quality lithium brine. As per the senior leadership of Neo Lithium, it produced battery-grade lithium with 99.9 per cent purity. The lithium carbonate manufactured has been accepted to develop batteries by Contemporary Amperex Technology Co. Limited (CATL).
On September 16, the stocks of Neo Lithium were priced at C$ 4.78 at market close. Over the past year, the stocks rocketed by close to 513 per cent. However, on a quarter-to-date (QTD) basis, stocks increased by 65 per cent.
On the valuation metrics, the ROE of the mining scrip stood at 14.76 per cent, ROA was 14.28 per cent, and the P/B ratio was 6.73.
Investing in small-cap companies offers certain advantages in terms of higher and faster growth potential and a possibility to trade the stocks of these companies at lower price points.