Small Cap Stocks Trading Below Cash Value

The Canadian small cap stocks on our list could be a value investor’s dream

SmallCapPower | July 19, 2017: Value investors live by the motto of buying a dollar for 50 cents. This usually refers to buying a company for less than it is worth, and opportunities to buy a literal dollar for 50 cents are limited. It is tough to find companies that are trading below cash that are worth buying because there is usually a reason for the low valuation. In most cases, the money on the balance sheet must be used to service an impeding debt load. Today we have found four Canadian small cap stocks that are trading below cash and have either no debt or a manageable debt load, meaning that low valuation may be unjustified, giving shareholders an opportunity to capture an actual dollar at a discounted price.

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Transat AT Inc. (TSX: TRZ) – $6.15
Leisure & Recreation

Transat A.T. Inc. is a Canada-based international tour operator that specializes in holiday travel. The Company’s primary business consists of developing and marketing holiday travel services in package and air-only formats. It operates as an outgoing, as well as an incoming tour operator by bundling services purchased in Canada and abroad, and reselling them primarily in Canada, France, the United Kingdom and in over 10 other European countries, directly or through intermediaries. It is also a retail distributor, both online and through travel agencies, some of which it owns.

  • Market Cap: $228,540,921
  • Cash and Equivalents: $363,664,000
  • Debt/EBITDA: 0.0x

GMP Capital Inc. (TSX: GMP) – $3.05
Investment Banking & Brokerage Services

GMP Capital Inc. (GMP) is a diversified financial services firm that provides a range of financial products and services to a client base that includes corporate clients, institutional investors and high-net-worth individuals in two integrated segments. The Company operates in two segments: Capital Markets and Wealth Management. The Capital Markets segment provides investment banking, including advisory and underwriting services, institutional research and sales and trading serving corporate and institutional clients. The Wealth Management segment includes the Company’s non-controlling ownership interest in Richardson GMP Limited (Richardson GMP).

  • Market Cap: $245,604,892
  • Cash and Equivalents: $524,347,000
  • Debt/EBITDA: 6.1x

Automodular Corp. (TSXV: AM.H) – $2.43
Auto, Truck & Motorcycle Parts

Automodular Corporation is a Canada-based company, which has no active operations. The Company was a sequencer and sub-assembler of modules that are installed in equipment assembled by North American Original Equipment Manufacturers (OEMs) at plants in Canada. The Company’s subsidiaries include Tec-Mar Distribution Services, Inc. and Automodular Assemblies (Ohio) Inc.

  • Market Cap: $31,542,195
  • Cash and Equivalents: $33,799,000
  • Debt/EBITDA: 0.0x

Aimia Inc. (TSX: AIM) – $1.66
Advertising & Marketing

Aimia Inc. is a data-driven marketing and loyalty analytics company. The Company’s segments include Americas Coalitions, International Coalitions, Global Loyalty Solutions (GLS), and Corporate and Other. Within the Americas Coalitions segment, the Company owns and operates the Aeroplan Program, which is Canada’s coalition loyalty program, and its Canadian non-platform based loyalty services business. Within the International Coalitions segment, the Company owns and operates Nectar, which is the United Kingdom’s coalition loyalty program, and Air Miles Middle East, a coalition loyalty program in the United Arab Emirates, Qatar and Bahrain. The International Coalitions segment also includes its Shopper Insights and Communications business, which provides data-driven analytics and insights services to retailers and their suppliers.

  • Market Cap: $252,829,945
  • Cash and Equivalents: $293,000,000
  • Debt/EBITDA: 2.7x

Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.

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