5 Small Caps with 50%+ Net Income Increases, Trading Under 7x Earnings

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When finding an investment with potential value, one might look at trading multiples, and compare those to the industry multiples. One such multiple is Price/Earnings (P/E), which shows how much an investor is paying for $1 of net income. With the average TSX-listed stock trading at about 15x, a multiple of under 7x is intriguing. The companies on our list today not only showcase a low earnings multiple, but also have had significant earnings growth during the past three years.

Whitecap Resources Inc. (TSX: WCP) – $10.88

Oil & Gas Exploration and Production

Whitecap Resources Inc. is engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids in Western Canada. The Company’s activities are concentrated primarily in northwest central Alberta and southwest Saskatchewan. In May 2014, the Company acquired certain strategic light oil assets focused primarily in Whitecap’s Pembina Cardium / West Central core area, as well as at Boundary Lake in northeast B.C.

  • Market Cap: $3,242,386,005
  • P/E: 6.4x
  • Net Income 3 year CAGR: 160.9%
  • Revenues 3 year CAGR: 103.3%

Yangarra Resources Ltd. (TSX: YGR) – $1.16

Oil & Gas Exploration and Production

Yangarra Resources Ltd. is a junior oil and gas company engaged in the exploration, development and production of natural gas and oil in the Central Alberta, Medicine Hat and Jaslan areas of Alberta. It owns approximately 97,460 gross (87,491 net) acres of undeveloped land. The Company drilled 29 gross (19.4 net) wells in 2014, including a Duvernay horizontal well. Yangarra also drilled three Cardium wells by drilling a Duvernay well in the South Block, and participated in four non-operated wells.

  • Market Cap: $76,197,875
  • P/E: 2.7x
  • Net Income 3 year CAGR: 160.1%
  • Revenues 3 year CAGR: 36.6%

Prism Medical Ltd. (TSXV: PM) – $12.65

Medical Equipment, Supplies & Distribution

Prism Medical Ltd. is a provider of equipment and services used to move and handle mobility challenged individuals. Its products are marketed under the brand names of Prism Medical, Ergosafe, Waverley Glen and Nightingale. The Company also manufactures a line of products, including fixed ceiling lifts, portable ceiling lifts, floor lifts, slings, shower chairs and other ancillary patient handling products.

  • Market Cap: $68,841,174
  • P/E: 5.2x
  • Net Income 3 year CAGR: 78.7%
  • Revenues 3 year CAGR: -15.7%

Bankers Petroleum Ltd. (TSX: BNK) – $2.54

Oil & Gas Exploration and Production

Bankers Petroleum Ltd. (Bankers) is a Canada-based oil exploration and production company with a focus on petroleum assets in Albania. It generates all of its oil revenue from its operations in Albania, which is located northwest of Greece in southeastern Europe. Bankers has the full rights to develop the Patos-Marinza and Kucova oilfields in Albania pursuant to License Agreements with the Albanian National Agency for Natural Resources (AKBN) and Petroleum Agreements with Albpetrol Sh.A (Albpetrol), the state-owned oil and Gas Corporation. The Patos-Marinza oilfield is an onshore oilfield in continental Europe, holding approximately 5.1 billion barrels of Oil Initially in Place (OIIP).

  • Market Cap: $671,982,864
  • P/E: 5.0x
  • Net Income 3 year CAGR: 53.0%
  • Revenues 3 year CAGR: 21.7%

Imperial Equities Inc. (TSXV: IEI) – $4.51

Drug Retailers

Imperial Equities Inc. (Imperial) is a Canada-based company, engaged in development and redevelopment of commercial and industrial properties primarily in Edmonton and throughout Alberta. The Company operates in two business segments: Pharmaceutical segment and Real Estate segment. The Company’s investments include properties with untapped potential, which it then renovates and improves the investment to maximize its value and ultimately its financial return. Imperial Equities holds a growing supply of banked land in traffic industrial corridors, which has been earmarked for build-to-suit opportunities. Imperial also distributes pharmaceutical products to the institutional and retail customers through its wholly-owned subsidiary, Imperial Distributors Canada Inc.

  • Market Cap: $41,603,003
  • P/E: 4.4x
  • Net Income 3 year CAGR: 51.3%
  • Revenues 3 year CAGR: 11.7%

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