Investing in essentially robust firms that commerce at a gorgeous a number of is a confirmed technique to generate outsized positive aspects over time. One such low-cost Canadian inventory is Mattr (TSX:MATR), which is valued at a market cap of $645 million.
Mattr is a Canadian supplies expertise firm that serves transportation, communication, water administration, and vitality markets globally. Working by two segments, it manufactures composite applied sciences, together with versatile pipes for oil and fuel purposes below the Flexpipe model and fibreglass storage tanks plus stormwater administration merchandise below the Xerxes model.
Its Connection Applied sciences section produces heat-shrinkable tubing, sleeves, and low-voltage wiring options for industrial purposes.
The TSX inventory has grossly underperformed the broader markets since its preliminary public providing in 2010. MATR inventory is down 82.5% beneath all-time highs and has declined by 60% during the last 15 years.
Right here’s why MATR inventory could possibly be one of the best cut price purchase on the TSX in the present day.
The bull case for this Canadian inventory
Within the second quarter (Q2) of 2025, Mattr reported income of $321 million, a rise of 33% yr over yr, with an adjusted EBITDA (earnings earlier than curiosity, tax, depreciation, and amortization) of $42.5 million, up 5%.
The Connection Applied sciences section achieved file quarterly efficiency with income practically doubling, due to the AmerCable acquisition accomplished late final yr. The mixed backlog of cross-selling alternatives between AmerCable and Shawflex now exceeds $10 million for supply in 2026.
Nevertheless, copper tariffs launched by the U.S. administration current significant challenges. Mattr spends between $100 million and $130 million yearly on copper merchandise, making it the corporate’s largest materials enter price.
Administration estimates present tariffs will improve prices by mid-single digits even after mitigation efforts. These prices will probably be handed by to clients, which can influence shopping for behaviour amid larger costs.
Mattr additionally accelerated provide chain diversification to supply extra supplies inside the U.S. to scale back publicity. The Composite Applied sciences section faces headwinds with income falling 5% in Q2 as worldwide Flexpipe tasks slowed, whereas Xerxes confronted manufacturing constraints regardless of strong demand.
Administration highlighted that Xerxes set a quarterly income file whereas underperforming on output as a consequence of workforce challenges at its new South Carolina facility. The enterprise presently holds its highest supply backlog since 2021, with orders extending into the primary half of 2026.
Flexpipe continues to showcase resilience by greater than doubling income per accomplished nicely since 2021 by share positive aspects in bigger diameter merchandise. The enterprise now derives roughly 40% of income from five-inch and six-inch merchandise with plans to introduce even bigger diametres in early 2026, increasing the addressable market by over 50%.
Is the TSX inventory undervalued?
Administration expects third-quarter outcomes to be modestly beneath second-quarter ranges as market uncertainty persists, however stays assured the modernized manufacturing footprint positions Mattr for margin enlargement in 2026.
Analysts monitoring MATR inventory forecast income to extend from $885 million in 2024 to $1.55 billion in 2029. Its free money circulate is forecast to enhance to $168 million in 2029, in comparison with an outflow of $59 million in 2024.
If the TSX inventory trades at 10 instances ahead FCF, which is cheap, it ought to acquire 160% inside the subsequent 4 years. Analysts stay bullish and forecast the inventory to realize 22% over the subsequent 12 months, given consensus worth targets.
