- Many investors looking for small cap stocks, look for companies that may grow in the future and with it, its share’s price
- These stocks seem to be either on the rebound or rising and are trading fairly below their highs over the last 12 months
- OYL is 72 per cent lower than its 52-week high
With small cap stocks comes the opportunity to buy a future large cap stock for the price of a small cap one. Meaning, many investors looking for small cap stocks, look for companies that may grow in the future and with it, its share’s price.
However, not all companies grow and there can be volatility in small cap stocks, rarely seen in large cap companies. Let’s look at some TSXV small cap stocks that make for an interesting watch in Q3 2022.
Rock Tech Lithium Inc (TSXV:RCK)
Rock Tech is in the process of creating Europe’s first lithium hydroxide converter and it plans to feed it with its own Canadian resources.
RCK closed Tuesday, May 24, at C$5. Over the last 12 months, the stock has grown 23 per cent. Its three-month growth stands at 10 per cent.
The stock is 47 per cent lower than it 52-week high price of C$9.38 seen on October 19, 2021.
Sernova Corp (TSXV:SVA)
The clinical-stage company makes products for treating debilitating diseases. SVA closed Tuesday at C$1.54, having grown 1.3 per cent.
The stock has gained 18.5 per cent in nine months and 10 per cent in the last 30 days. It is 31 per cent lower than its 52-week high of C$2.2 that came on January 7.
Africa Energy Corp (TSXV:AFE)
The company’s oil and gas interests are in Namibia and South Africa. AFE closed Tuesday at C$0.29.
The stock is up 16 per cent year-to-date and 14 per cent on a three-month basis. In the last week it has spiked two per cent. It is 16 per cent lower than its one-year high of C$0.34 seen on October 22, 2021.
The company has a price-to-earnings (P/E) ratio of 10.9 which suggests that for a one-dollar gain, just under C$11 needs to be invested.
Arizona Metals Corp (TSXV:AMC)
The company explores gold and copper deposits and its stock on Tuesday closed at C$5.39. In the last nine months, it has spiked 37 per cent but it has fallen 13 per cent over the last month.
Up 0.4 per cent in the last week, AMC seems to be on the rebound after it likely hit undervalued territory earlier in May. It makes for an interesting watch in Q3, considering its trajectory.
CGX Energy Inc (TSXV:OYL)
CGX’s petroleum and natural gas interests are in Guyana. On Tuesday, OYL closed trade at C$1.27.
The stock, over the last year, has returned 43 per cent. It has gone through a bearish phase since it hit its 52-week high of C$4.53 on February 1, at which point it was possibly overvalued. It is a whopping 72 per cent lower than that.
It is possibly under 10 per cent away from being undervalued and makes for an interesting watch next quarter, especially after it rebounded 2.4 per cent Tuesday.
Some of these stocks don’t have noteworthy valuation metrics and research into these are vital before any investment. However, with small caps, the idea may be to consider growth and research into the companies’ plans and the outlook for the sector is vital.
These stocks seem to be either on the rebound or rising and are trading fairly below their highs over the last 12 months, as the graphic shows. They should make for an interesting watch in the coming quarter.
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.