If you got some loose change that you are looking to invest, there are some decent opportunities today. Small and medium cap stocks are a great place to invest if you want a fair price, but substantial potential upside. Here are four attractive small caps to buy with $200 right now.
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A software turnaround stock
With a market cap of $172 million, Sylogist (TSX: SYZ) is not on many investors’ radar. It provides enterprise software solutions for municipalities, education districts, and non-profits in Canada and the United States.
Sylogist has been immersed in a comprehensive turnaround strategy. A new management team has been aggressively investing in its product mix, sales team, and customer support functions. With a growing industry rapport, it has started to make some notable customer wins (like the United Way in Texas).
Incumbent competitors have a stagnant product offering. Whereas Sylogist has an updated software mix that is beginning to take market share. Sylogist trades at a huge discount to peers today. If it can demonstrate its growth strategy, the stock could have considerable upside.
A steady growth business at a fair valuation
Calian Group (TSX: CGY) is another small cap stock that the market has forgotten. It has a market cap of $645 million. Calian has segments in healthcare, specialized technologies, cybersecurity/IT, and training.
It is a major vendor to the Canadian government and defence department. However, through several acquisitions, it has diversified its customer base both geographically and by service category.
Calian has grown by a mid-to-high teens rate for the past five years. Yet, its stock is down about 10% in the past three years.
It expects to grow earnings by 30%-plus in 2024. CGY only trades for a price-to-earnings (P/E) ratio of 11, which appears to be an attractive price given its growth prospects.
A fintech stock on a fast upward trend
Another no-brainer stock to buy with $200 is Propel Holdings (TSX: PRL). It has a market cap of $870 million today. The fast-growing fintech company provides specialized small loans to non-prime consumers.
Certainly, non-prime customers are a riskier segment. However, Propel has an intelligent lending platform that is able to quickly and efficiently determine risk. It also charges substantial interest rates to compensate for the risk.
Propel has grown revenues by a 60% compounded annual rate over the past three years. Earnings per share are up by a 31% compound annual rate. The company is projecting 30 to 40% growth in 2024. With a P/E of 14, this stock could still see strong growth if it continues to hit its numbers.
A small, but fast-growing insurer
With a market cap of $2 billion, Trisura Group (TSX: TSU) is one of the smallest listed insurers in Canada. Despite its size, this company could still become significantly larger in the years ahead.
Trisura provides specialized insurance solutions in Canada and the U.S. It also has an insurance fronting segment that has been providing solid growth. It does not operate in the easiest areas to underwrite. However, given its expertise in more complex insurance solutions, Trisura can earn elevated returns over other non-specialized peers.
This insurer is very profitable and consistently earns a return on equity (ROE) of 15 to 20%. Trisura had a bit of a glitch that stalled growth in 2023. It has rectified it and looks postured for strong growth in 2024.
TSU stock trades for 3 times price-to-book and 14 times earnings. Both metrics are substantial discounts to larger specialized peers in the U.S. This could be an attractive time to build a long-term position in Trisura.
