The small cap Canadian stocks on our list, with low trading liquidity, have insider ownership that exceeds 30%
SmallCapPower | September 16, 2019: Insider ownership outside of the Board of Directors or the management team includes investors with a 10% or greater equity stake. Significant insider ownership signals confidence in a company’s prospects, as it is seen as an incentive with profitability and maximization of shareholder wealth and value over the long-term. Today we have identified four small cap Canadian stocks trading on the TSX/TAXV with insider ownership greater than 30% that trade on low volume, which could be an indicator that the stock has been overlooked.
*Share prices as at September 12, 2019, data obtained from S&P Capital IQ
TWC Enterprises Limited (TSX:TWC) – $13.20
Hotels, Restaurants and Leisure
TWC Enterprises Limited, (formerly ClubLink), is a Canada-based owner and operator of golf clubs. The Company operates through two business segments: Golf Club Operations and Corporate Operations. The Golf Club Operations operates under the ClubLink One Membership More Golf name, where golfers can golf at any location under the ClubLink banner. TWC owns and operates approximately fifty 18-hole golf courses and forty 18-hole equivalent golf courses all in Ontario/Quebec and Florida. TWC’s revenues are seasonal, with a majority of revenue coming in the summer months. During F2018, the Company generated $165.9M in revenue and is on track to repeated for F2019E, with ~$70M in revenue in the first half of 2019. TWC pays a quarterly dividend of $0.02 (dividend yield: 0.6%).
- Market Cap: $353.2M
- 90-Day Return: -10.6%
- YTD-Return: 1.5%
- 90-Day Average Trading Volume: 174,250
- Insider Ownership: 74.0%
Goodfood Market Corp. (TSX:FOOD) – $3.01
Food Delivery
Goodfood Market is a Canada-based company, which operates in the meal-kit industry. The Company’s dinner subscription service is available through its website www.goodfood.ca, where consumers can select their favourite recipes from a collection of various original dishes and Goodfood delivers fresh ingredients that make it easy to prepare meals at home every week. The Company prepares a personalized box of ingredients and delivers it to the subscriber’s doorstep with step-by-step instructions. On September 4, 2019, Goodfood Market announced that for Q4/19 (ended August 31, 2019) it had reached 200,000 active subscribers, an increase of 125% YoY.
- Market Cap: $175.0M
- 90-Day Return: 3.5%
- YTD-Return: 10.9%
- 90-Day Average Trading Volume: 178,160
- Insider Ownership: 37.3%
Hammond Power Solutions Inc. (TSX:HPS.A) – $8.25
Electrical Equipment
Hammond Power Solutions is a Canada-based manufacturer of dry-type magnetics. The Company is engaged in the design and manufacture of custom electrical engineered magnetics. Hammond Power is also a manufacturer of standard electrical dry-type, cast resin and liquid filled transformers. HPS Standard Products are available across over four categories, which include control and automation; low voltage distribution; medium voltage distribution, and potted and specialty. HPS also offers original equipment manufacturers (OEM) a set of products and services. The Company has manufacturing plants in Canada, the United States, Mexico, Italy and India. On July 23, 2019, HPS announced Q2/19 financial results: revenue rose 9.4% QoQ to $91.9M. The Company pays a quarterly dividend of $0.07 (dividend yield: 3.4%).
- Market Cap: $96.7M
- 90-Day Return: 4.4%
- YTD-Return: 44.7%
- 90-Day Average Trading Volume: 28,930
- Insider Ownership: 34.3%
Assure Holdings Corp. (TSXV:IOM) – $2.15
Health Care Providers and Services
Assure Holdings is a Canada-based company that works with neurosurgeons and orthopedic spine surgeons to provide a suite of services that support intraoperative neuromonitoring activities during invasive surgeries. The Company offers Intraoperative Neurophysiologic Monitoring (IONM) techniques to identify changes in brain, spinal cord, and/or peripheral nerve function in order to prevent complications that could result in irreversible nerve damage during surgeries. On August 29, 2019, the Company reported Q2/19 financial results: revenue increased 137% QoQ to $8.4M and EPS increased to $0.09 (was $0.03).
- Market Cap: $73.4M
- 90-Day Return: 28.7%
- YTD-Return: 4.9%
- 90-Day Average Trading Volume: 71,960
- Insider Ownership: 51.7%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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