5 TSX small-cap stocks to watch before 2023

• Uni-Select’s sales in Q3 2022 were noted at US$ 452.68 million.
• Precision Drilling’s adjusted EBITDA was at C$ 119.56 million in Q3 2022.
• In Q3 2022, Primaris REIT’s cash net operating income was C$ 53.1 million.

Investors usually prefer small-cap stocks because of their diversification aspect. If chosen correctly, they may prove to be the first step to a balanced portfolio.

Like other stocks, they may offer varied results at different times. Sometimes, they may offer stable returns, outperforming the large-cap stocks, while other times, they may have to be carefully looked upon before selecting. This showcases the liquidity aspect. Hence, as an investor, select your stocks diligently to improve the quality of your portfolio.

Furthermore, proper analysis may give you an overall perspective of the stock market.

In addition to this, look for the risk factors affecting your portfolio. Accordingly, form a strategy to safeguard your portfolio and stabilize against ongoing uncertainties. Risk mitigation and the right market growth may help structure your portfolio in the desired direction. Therefore, be alert and well-informed while operating in the market.

Amid this discussion, let us have a look at the five small-cap stocks along with their recent financial highlights:

1. Uni-Select Inc. (TSX:UNS)

Uni-Select  is engaged in the distribution of paint and automotive products for motor vehicles. The company operates in the Parts Alliance UK, Canadian Automotive Group and FinishMaster US segments. Out of the three, FinishMaster US segment contributes the majority of the revenue for Uni-Select.

Uni-Select’s sales in Q3 2022 rose to US$ 452.68 million from US$ 426.09 million in Q3 2021.

Meanwhile, the EBITDA grew to US$ 47.61 million, reflecting a year-over-year (YoY) increase of 34.8 per cent. The net earnings jumped 88 per cent YoY to US$ 22.41 million.

Notably, the cash flow from operating activities grew to US$ 74.62 million from US$ 42.86 million for the reported quarter. Uni-Select’s free cash flow soared to US$ 67.15 million from US$ 36.95 million.

On September 30, 2022, Uni-Select’s total net debt fell to US$ 264.44 million from US$ 309.23 million on December 31, 2021.

2. Sierra Wireless Inc. (TSX:SW)

Sierra Wireless provides Internet-of-Things solutions along with designing wireless communication equipment. It operates with two business segments- Embedded broadband and Internet of Things solutions. The company offers products and services that include high-speed cellular modules, cloud platforms, connectivity services, and cellular gateways.

In Q3 2022, Sierra Wireless’ revenue was noted at US$ 166.05 million compared to US$ 82.45 million in Q3 2021. For the same comparable period, the gross margin rose to US$ 56.61 million from US$ 24.14 million.

On September 30, 2022, the cash and cash equivalents increased to US$ 126.04 million from US$ 76.78 million on December 31, 2021. Meanwhile, the total assets grew to US$ 604.2 million from US$ 547.05 million.

3. Athabasca Oil Corporation (TSX:ATH)

Athabasca Oil Corporation operates as an energy company focusing on the production, development and exploration of liquids-rich natural gas and light oil. With a total market capitalization of C$ 1482.69 million, the company has two segments-Light Oil and Thermal Oil, the latter being the major contributor to the company’s revenue.   

In Q3 2022, Athabasca Oil’s cash flow from operating activities increased to C$ 117.85 million from C$ 75.74 million in the year-ago quarter. The adjusted funds flow rose to C$ 102.37 million from C$ 72.23 million for the same comparable period. The net income and the comprehensive income were posted at C$ 155.09 million compared to C$ 104.95 million. The company’s EPS is C$ 0.84.

Athabasca Oil’s Net Income basic per share in two different quarters:

4. Primaris Real Estate Investment Trust (TSX: PMZ.UN)

Primaris REIT focuses on enclosed shopping centres and is based in Canada with ownership interests in enclosed shopping centres.

In Q3 2022, Primaris Real Estate’s cash flow from operating activities was noted at C$ 50.9 million compared to C$ 12.75 million in the year-ago quarter. The total revenue rose to C$ 94.15 million from C$ 62.21 million for the same comparable period. The company’s total assets increased to C$ 3.18 billion from C$ 2.42 billion for the reported quarter.

Meanwhile, the cash net operating income soared to C$ 53.1 million from C$ 34.27 million. Primaris Real Estate authorized a monthly dividend per share of C$ 0.067 to its shareholders. The company reported its dividend yield at 5.372 per cent with an EPS of C$ 0.12.  

5. Precision Drilling Corporation (TSX:PD)

Precision Drilling Corporation is a contract drilling provider and offers completion and production services. It operates in North American oil and gas services. With a total market capitalization of C$ 1412.53 million, the company offers its services to natural gas and oil production and exploration companies in Canada.  

Precision Drilling’s revenue in Q3 2022 was noted with an increase of 69.2 per cent at C$ 429.33 million compared to the same quarter of the previous year. For the same comparable period, the adjusted EBITDA increased to C$ 119.56 million from C$ 45.4 million.

The company posted net earnings of C$ 30.67 million versus a net loss of C$ 38.03 million. The funds provided by operations rose to C$ 81.32 million from C$ 33.52 million for the reported quarter.

Bottom Line

Every small-cap stock has a different growth pattern and trajectory. This depends upon the individual goal of the investor and their portfolio. Before investing, check your wealth goals and look for the stocks accordingly. Also, reposition your portfolio from time to time to beat the market volatility.

Surviving the fluctuations followed by the right stock selection gives you the confidence to operate long-term in the market. Follow the trick of betting on the right horse and be closer to your investment goals.

Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.