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. We have found 4 Canadian small cap stocks that are trading below cash value 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.
1. Transat AT Inc. (TSX: TRZ)
Leisure & Recreation
Transat A.T. Inc. is an international tour operator…[that] develops and markets 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 another 10 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
2. GMP Capital Inc. (TSX: GMP)
Investment Banking & Brokerage Services
GMP Capital Inc….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, namely: 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.
- Market Cap: $245,604,892
- Cash and Equivalents: $524,347,000
- Debt/EBITDA: 6.1x
3. Automodular Corp. (TSXV: AM.H)
Auto, Truck & Motorcycle Parts
Automodular Corporation…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
4. Aimia Inc. (TSX: AIM)
Advertising & Marketing
Aimia Inc. is a data-driven marketing and loyalty analytics company…[which] owns and operates the Aeroplan Program, which is Canada’s coalition loyalty program; 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. It also operates a 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
The comments above are edited ([ ]) and abridged (…) excerpts from the original article by SmallCapPower.com
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