There’s plenty of opportunity in the market to go around. Whether we’re talking about large-cap stocks with increasing earnings potential thanks to artificial intelligence and other key catalysts or smaller high-growth names with their own sets of catalysts, this does look like a market of opportunity.
That said, picking the kind of small-cap growth stocks with sustainable upside for years or decades to come is the tricky part. There are plenty of flashes in the pan to try to take advantage of before their flames are extinguished, and most small-cap companies eventually run into trouble or are delisted; that’s the name of the game.
That said, I think I’ve found three small-cap Canadian stocks that all investors should at least consider. Let’s dive in.
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The Metals Company
Canada-based The Metals Company (NASDAQ: TMC) remains one of my top small-cap picks that I think can provide investors with significant long-term value.
The company’s business model revolves around securing deep-sea mining permits to explore the ocean floor.
What’s on the ocean floor? Golf ball-sized nodules of key battery minerals, which TMC sucks up via a vacuum-like machine to the surface, and brings them to shore on a barge. Doing this sort of mining may be much less environmentally damaging than above-ground mining for the same minerals, which utilize child labour in some cases, to bring us the batteries we need for the electrification revolution.
Curaleaf
Now, for a cannabis stock many investors may have forgotten about. Curaleaf (TSX: CURA) is among the leading players in the U.S. market, and a stock that many investors may have pushed aside for other high-growth opportunities in other sectors of late.
Of course, the 2017 and 2018 cannabis bubble we saw play out for another year or so following Canadian legalization hasn’t necessarily panned out the way many investors expected, particularly in other markets like the U.S. That said, a move from the Trump administration to reportedly look at revising how cannabis is scheduled in the U.S. market could be the key game-changer for this stock, and it’s the reason Curaleaf’s stock price has done what it has in recent months (see chart above).
Bird Construction
Last, but certainly not least on this list of Canadian small-cap stocks that I think investors should consider is Bird Construction (TSX: BDT).
A small-cap construction and maintenance company focused on the Canadian market, Bird has flown under the radar in terms of the sort of housing stocks most investors may attribute to the Canadian market.
With solid balance sheet stability and a long (and growing) backlog of work for years to come, this is a way to play the continued housing boom in Canada, which should pick up under Prime Minister Carney (if he lives up to his word).
Each of these companies may be a relative long shot, at least compared to most of the blue-chip names most investors gravitate toward. However, they’re also the kind of risk-reward bets I think make sense for those who believe this bull market rally can continue.
