5 elite TSX small-caps on sale

Despite the lingering coronavirus pandemic, stock markets around the world appear to be reeling in wealth. The Canadian benchmark index of S&P/TSX composite hit the 20,000-mark in June 2021 for the first time in its history.

The year-to-date (YTD) return of the index stood at about 16 per cent on Thursday, July 29, while its one-year return was over 25 per cent.

In this backdrop, are there any small-cap stocks on the Toronto Stock Exchange (TSX) that investors could take note of?

Here, we take a look at five such small-cap stocks that are discounted. Let’s take a look at their recent earnings and price-to-earnings (P/E) ratio to understand their performance better for the near-to-medium term period.

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1. Pollard Banknote Limited (TSX: PBL)

Pollard Banknote operates in the charitable gaming and lottery sector. The company posted a market cap of over C$ 1.3 billion on July 28 and a P/E ratio of 31.9, as per TMX.

Pollard Banknote’s stock, at a closing price of C$ 51.01 on July 28, posted a loss of about 18 per cent for the last three months.

In the first quarter of 2021, the company reported a net income of C$ 7.5 million, as compared to a loss of C$ 1.3 million in Q1 2020. Pollard’s total sale was over C$ 112 million in the latest quarter, as against that of C$ 102.2 million in Q1 2020.

2. HEXO Corp. (TSX: HEXO)

HEXO Corp, a cannabis producer based in Canada, focuses on brands such as Up Cannabis and HEXO Cannabis. HEXO also caters to the medical cannabis market.

With a closing stock price of C$ 5.38 on July 28, the company held a market cap of roughly C$ 820 million. The P/E ratio of the stock was -2.7.

HEXO’s stock has lost over 30 per cent in the last three months.

In third quarter fiscal of 2021, the company reported a net revenue of C$ 22.6 million, which was down on a year-over-year (YoY) basis. HEXO Corp attributed this decline in revenue to the dip in the sale of its non-beverage adult-use products.

3. Gran Colombia Gold Corp. (TSX: GCM)

Gran Colombia is engaged in the exploration and production of metals like gold and silver. The company earns its revenue from the sale of these precious metals.

On July 28, Gran Columbia recorded a closing stock price of C$ 4.7 and a market cap of about C$ 460 million and a P/E ratio of about 2.5.

Gran Colombia Gold’s stock has lost over 12 per cent in the last three months.

In the first quarter of 2021, Gran Colombia reported a consolidated revenue of US$ 101.9 million. Its adjusted EBITDA in Q1 2021 was US$46.3 million, as compared to that of US$ 50.4 million in Q1 2020.

4. Alcanna Inc. (TSX: CLIQ)

Alcanna is a major player in the alcohol retail industry in Canada and the US. The company operates multiple stores under brands that include Ace Liquor Discounters, and Wine and Beyond. It also operates some cannabis stores.

The liquor stock closed at a value of C$ 6.56 on July 28, with a market cap of about C$ 237 million. The P/E ratio of the stock stood at 2.1, as per TMX.

Alcanna’s stock has lost over 12 per cent in the last three months.

In the first quarter of 2021, the liquor company reported total sales of over C$ 142 million, which was notably up from that of C$ 138.2 million in Q1 2020.

5. NuVista Energy Ltd. (TSX: NVA)

NuVista Energy is engaged in the business of oil and natural gas exploration and production. Its stocks closed at a value of C$ 3.47 on July 29.

The company held a market cap of over C$ 780 million and a P/E ratio of 1.3, as per TMX.

NuVista Energy’s stock has gained over 50 per cent in the last three months.

In the first quarter of 2021, NuVista reported petroleum and natural gas revenues of over C$ 151 million, which were significantly up from that of C$ 127 million in Q1 2020. Its net earnings in Q1 2021 stood at C$ 15.3 million.