5 Canadian Small Cap Stocks That Could Be Due for a Correction

The Canadian small cap stocks on our list are trading well over their intrinsic value

SmallCapPower | June 7, 2017: Value investing will teach you to purchase stocks trading well below their intrinsic value, and doing the opposite would be a sin in the eyes of investors like Warren Buffett or Benjamin Graham. Today we have identified five Canadian small cap stocks trading well above their intrinsic value based on the Star Mine Price/Intrinsic value country rank model, with 1 representing the worst possible value and 100 representing the best.

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Knight Therapeutics Inc. (TSX: GUD) – $9.75

Knight Therapeutics Inc is a Canada-based pharmaceutical company engaged in developing, acquiring, in-licensing, out-licensing, marketing and distributing pharmaceutical products, consumer health products and medical devices in Canada and select international markets. It finances other life sciences companies in Canada and internationally. Its prescription pharmaceuticals and medical devices in various stages of development include Impavido, AzaSite, ATryn, Photofrin, ILUVIEN, TULSA-PRO, PROBUPHINE, Advaxis Family of Products, Ember Family of Products, NeurAxon Family of Products, Antibe Family of Products, Blood Factor Products and VEWS Vascular Early Warning System.

  • Market Cap: $1,391,903,428
  • Total Revenue (LTM): $5,940,000
  • Debt to Equity: 0.0%
  • Price/Intrinsic Value Country Rank: 2

Freshii Inc. (TSX: FRII) – $13.24
Restaurants & Bars

Freshii Inc is a Canada-based company, which is a restaurant operator. The Company is engaged in serving a customizable menu built around ingredients, such as fresh produce, lean proteins, healthy grains and ethnic spices. The Company operates through two segments: franchise store operations and Company-owned store operations. The franchise segment consists of its North American and international franchise stores. The Company-owned segment consists of its Company-owned stores. The Company’s menu includes salads, bowls, burritos, wraps, soups, juices, smoothies and frozen yogurt, all of which can be customized with various combinations from a range of ingredients. In addition to its meals, the Company’s menu offers snacks that manage customers throughout the day.

  • Market Cap: $333,863,877
  • Total Revenue (LTM): $15,343,613
  • Debt to Equity: N/A
  • Price/Intrinsic Value Country Rank: 4

People Corp. (TSXV: PEO) – $6.08
Restaurants & Bars

People Corp is a Canada-based employee benefit, pension and human resource consulting company involved in the delivery of employee group benefit consulting, pension consulting and third-party benefits administration services, as well as recruiting services, strategic human resources consulting and career management services to allow companies recruit, retain and reward employees. Its operating areas include Consulting Solutions, which focuses on providing an employee benefit, group retirement and human resource solution; Benefit Solutions, which has various third-party administration service platforms allowing it to provide consulting advice; Human Resource Solutions, which works with clients to diagnose, design and deliver customized human resource solutions, and Shared Services, which works with its subsidiaries and divisions by providing subject matter experts and its own products, services and solutions.

  • Market Cap: $310,086,931
  • Total Revenue (LTM): $79,802,250
  • Debt to Equity: 90.6%
  • Price/Intrinsic Value Country Rank: 4

Sienna Senior Living Inc. (TSX: SIA) – $17.55
Healthcare Facilities & Services

Sienna Senior Living Inc. is a Canada-based company, which is engaged in serving the range of independent living (IL), independent supportive living (ISL), assisted living (AL), memory care (MC) and long-term care/residential care (referred to as LTC) communities. The Company’s segments include LTC business, Retirement, Baltic, Corporate, Eliminations and Other. Its LTC segment includes over 30 owned LTC homes and the management services business. Its Retirement segment includes approximately 10 owned retirement residences (RR) communities. Its Baltic includes seven Baltic properties in, which the Company’s interest is in the Nicola Lodge and Pacific Seniors Management General Partnership (PSM).

  • Market Cap: $810,583,856
  • Total Revenue (LTM): $497,887,000
  • Debt to Equity: 250.4%
  • Price/Intrinsic Value Country Rank: 4

CRH Medical Corp. (TSX: CRH) – $8.05
Medical Equipment, Supplies & Distribution

CRH Medical Corporation is a Canada-based healthcare products and services company focused on providing physicians with services and products for the treatment of gastrointestinal diseases. The Company also provides anesthesiology services to gastroenterologists in the United States through its subsidiaries. The Company specializes in the treatment of hemorrhoids utilizing its treatment protocol and technology. The Company’s product distribution strategy focuses on physician education, patient outcomes, and patient awareness. The Company’s CRH O’Regan System, platform that provides gastrointestinal is a single use, disposable, hemorrhoid banding technology for treating hemorrhoid grades I-IV.

  • Market Cap: $105,230,268
  • Total Revenue (LTM): $105,230,268
  • Debt to Equity: 72.6%
  • Price/Intrinsic Value Country Rank: 6

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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