3 Canadian Penny Stocks To Buy In July

Investing in penny stocks can be a high-risk, high-reward strategy, especially in a volatile market. In this article, we're focusing on three promising Canadian penny stocks that have shown significant growth potential recently.

Tornado Global Hydrovacs Ltd. $TGH.V

Tornado Global Hydrovacs Ltd. is a Canadian company that designs and manufactures hydrovac trucks, essential for safe excavation in infrastructure, industrial construction, and oil and gas sectors. These trucks use high-pressure water and vacuum systems to expose underground infrastructure without causing damage.

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In Q1 2024, Tornado’s revenue jumped to $33.9 million from $21.1 million the previous year, with gross profit rising to $5.7 million. The company’s move to a new production facility has doubled its manufacturing capacity, meeting increasing market demand efficiently. Sourcing parts from China has also slashed costs and streamlined supply chains.

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Their hydrovac models, like the F2, F3, F4, and F5 ECO-LITE, cater to various applications, especially in urban areas where traditional excavation might be disruptive. A key growth driver is their agreement with Ditch Witch, which is projected to bring in at least $44 million USD over four years. However, Tornado’s reliance on key contracts and potential supply chain hiccups are risks to monitor.

CEMATRIX Corporation $CVX.V

CEMATRIX Corporation specializes in advanced cellular concrete for North American infrastructure, industrial, energy, and commercial markets. Known for its lightness and durability, this concrete is ideal for road construction and utility insulation.

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2023 was a breakthrough year for CEMATRIX. Revenue jumped to $53.3 million from $29 million in 2022, with gross profit reaching $11.9 million. These improvements show effective cost management and strong demand.

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In Q1 2024, they reported $8.4 million in revenue, up from $7.2 million the previous year. Their gross margin saw a solid boost, rising to $2.6 million from $746,000, indicating that they are scaling operations efficiently.

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Their cellular concrete is highly valued for its high strength-to-weight ratio and resistance to hydrocarbons and freeze/thaw cycles. Positive client testimonials highlight their efficiency in reducing project costs and timelines. One client reported saving over 5,000 man-hours and accelerating their schedule by seven weeks due to CEMATRIX’s effective product application.

SIMPLY SOLVENTLESS CONCENTRATES $HASH.V

Simply Solventless Concentrates Ltd. produces high-quality, terpene-rich solventless cannabis concentrates. Their products cater to the recreational, medical, and business-to-business markets, focusing on purity and natural extraction methods.

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SSC has shown steady financial growth, with six straight quarters of net income profit. In 2023, they reported $7 million in revenue, projecting an impressive growth to $40 million by the end of 2024, with $6 million in net income.

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A key part of their strategy is strategic acquisitions. In January 2024, SSC acquired Lamplighter and CannMart Inc. These acquisitions are expected to significantly boost SSC's market share, with the CannMart deal alone projected to increase their revenue by approximately $20 million without additional long-term debt.

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SSC recently took a big step by bringing hydrocarbon extraction in-house. This decision is expected to bump their gross margins from 25% to 34%, translating to annual savings of over $1 million. The new extraction equipment is anticipated to pay for itself in just nine months, reflecting their focus on efficiency and cost control.

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Sources:

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Information for this article was sourced from each company’s website and recent press releases:

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Tornado Global Hydrovacs Ltd.: Company website and Q1 2024 press release.

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CEMATRIX Corporation: Company website and Q1 2024 press release.

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Simply Solventless Concentrates: Company website, recent press releases, and corporate presentations.

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