7 Canadian small-cap stocks under $20 explored by Kalkine Media

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7 Canadian small-cap stocks under $20 explored by Kalkine Media

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 7 Canadian small-cap stocks under $20 explored by Kalkine Media
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Highlights

  • Canada’s main equity index slipped by almost 10 per cent in 2022
  • IBI Group saw its stock rise by nearly 75 per cent in 52 weeks
  • BELLUS Health stock swelled by over 255 per cent in one year

Equity investors targeting long-term capital gains can explore under C$ 20 small-cap stocks like IBI Group (TSX: IBI), BELLUS Health (TSX: BLU), SunOpta (TSX: SOY), etc.

Canada’s main equity index slipped by almost 10 per cent in 2022 as economic factors like high inflation, and interest rate surges continue to build pressure on consumers worldwide, hitting market sentiments. Amid such an environment, investors might benefit from long-term investing plans, accruing significant gains in the future.

Hence, Kalkine Media® has shortlisted the following small-cap stocks under C$ 20 that one can explore right now for future returns:

1.     IBI Group Inc (TSX: IBG)

IBI Group is a C$ 604.31 million market capitalization firm that provides engineering services and technology-based infrastructural solutions to clients across Canada, the United States, and the United Kingdom.

The Toronto-headquartered construction firm saw its net revenue climb 12 per cent year-over-year (YoY) to C$ 123.33 million in the second quarter of FY2022. This quarterly revenue increase included organic growth of 9.6 per cent. IBI Group said its net profit reached C$ 9.16 million in the latest quarter, a 10 per cent jump from C$ 8.3 million recorded in the same period of 2021.

IBI Group saw its stock rise by nearly 75 per cent in 52 weeks. As per Refinitiv findings, The IBG stock had a high Relative Strength Index (RSI) value of 81.28 on September 1, reflecting a bullish momentum.

2.     BELLUS Health Inc (TSX: BLU)

BELLUS Health is a clinical-stage biopharma firm with a market capitalization of C$ 1.98 billion. BELLUS is developing a therapeutical treatment for chronic refractory cough (RCC) and other cough hypersensitivities.

Announcing its Q2 FY2022 financial results on August 10, the small-cap healthcare firm revealed that it completed a positive end-of-phase three meeting with the US Food and Drug Administration (FDA). In addition, the European Medicines Agency (EMA) also provides scientific advice to the Canadian biotechnology company for its CALM Phase 3 clinical program for BLU-5937 (a product candidate for RCC).

BELLUS Health stock swelled by over 255 per cent in one year. The BLU stock gained over 58 per cent in three months. According to Refinitiv, the small-cap biopharma stock appears to be gaining momentum as its RSI value was 62.92 on September 1, 2022.

3.     Viemed Healthcare Inc (TSX: VMD)

Viemed is a small-cap firm in the healthcare sector that provides medical equipment and home therapy solutions. Besides this, Viemed also offers post-acute respiratory healthcare services. Viemed posted a relatively high revenue of US$ 33.31 million in Q2 2022 from US$ 27.39 million in Q2 2021. As a result, the healthcare service provider also saw its gross profit improve to US$ 20.39 million in the latest quarter, compared to US$ 17.62 million in the same period last year.

Viemed stock rose by roughly 59 per cent in six months. As per Refinitiv information, the VMD stock recorded an RSI value of 39.64 on September 1, 2022, up from the bearish level of 30.

Kalkine explores IBG to TCL.A: 7 Canadian small-cap stocks under $20©Kalkine Media®; ©Garis Studio via Canva.com

4.     SunOpta Inc (TSX: SOY)

SunOpta is a C$ 1.4 billion market capitalization company offering consumer packaged goods (CPG). The small-cap company is focused on providing a healthy product portfolio, including plant-based and fruit-based food and beverages.

SunOpta reported a top line surge of 20.4 per cent YoY to US$ 243.53 million in Q2 2022. The consumer products company said that the increased revenue indicates a 31 per cent surge in plant-based and a 7.4 per cent rise in fruit-based.

SunOpta stock jumped by almost 49 per cent this year. The SOY stock galloped by nearly 102 per cent in six months. On September 1, 2022, this consumer stock saw an RSI value of 55.04, reflecting a moderate market condition, as per data collected from Refinitiv.

5.     Vecima Networks Inc (TSX: VCM)

Vecima Networks is a hardware firm offering integrated tech solutions via three operating segments, Video & Broadband, Content Delivery & Storage, and Telematics. Vecima saw its revenue grow to C$ 50.9 million in Q3 FY2022, a high from C$ 31.9 million posted in the second quarter last year. The small-cap hardware tech provider improved its gross margin to 47.1 per cent in the latest quarter than 45 per cent recorded a year ago. Vecima Networks also reported a net profit of C$ 3 million in the second quarter this year, higher than C$ 2.2 million in the same quarter of 2021.

Vecima scrip galloped by almost 37 per cent year-to-date (YTD). As per Refinitiv, the VCM scrip appears to be overbought (on a bullish trend) as its RSI value hit 80.6 on September 1, 2022.

6.     Absolute Software Corporation (TSX: ABST)

Absolute Software saw its cloud subscription services revenue jump by 67 per cent YoY to US$ 50 million in Q4 2022. Managed professional services revenue remained at US$ 1 million in the latest quarter, compared to Q4 2021. Besides this, other revenue rose by 67 per cent YoY to US$ 1.5 million in the fourth quarter this year. As a result, the software tech company noted a total revenue of US$ 52.5 million in the latest quarter, relative to US$ 31.8 million in the fourth quarter a year ago.

Absolute Software stock spiked by over 28 per cent quarter-to-date (QTD). As per Refinitiv data, the ABST stock had an RSI value of 55.94 on September 1, 2022, reflecting a moderate market situation.

7.     Transcontinental Inc (TSX: TCL.A)

Transcontinental is a C$ 1.41 billion market capitalization business offering printing and packaging services. Besides, the industrial company also operates in the media sector focusing on print and digital publishing products. In June, the Montreal-based company announced acquiring Banaplast S.A.S., an Armenia-headquartered player providing packaging solutions to the agro-industrial sector. With this acquisition, Transcontinental aims to expand its packaging footprints in key markets like banana tree bags and Agri markets.

The Transcontinental stock shot up by roughly seven per cent QTD. According to Refinitiv, the TCL.A stock held an RSI value of 47.55 on September 1, 2022, denoting a medium trend.

Bottom line

Current market dynamics look highly volatile as economic challenges affect investment sentiments. However, the risk is a key factor when considering small-cap investing. Investors with abilities to bear high risk could explore quality small-cap stocks like the ones discussed here to capture significant long-term gains.

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.

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