According to a report by the Government of Canada, released on December 16, the country’s economic outlook has been revised upward, as private-sector economists forecast moderate growth of around 2% in the second half of 2025. The report highlights the average of private sector forecasts are used as the basis for economic and fiscal planning in Canada to ensure objectivity and transparency. The Department of Finance surveyed a group of 11 private sector economists in September 2024, who expect the Canadian economy to benefit from robust growth in the US, driven by rising equity markets and increasing confidence among US households and businesses. The economists forecast that the unemployment rate will also stabilize to 6.6% by the end of 2025 compared to 6.9% in the fourth quarter of 2024. The report also states that the government is reducing the federal debt-to-GDP ratio over the medium term. The federal debt-to-GDP ratio in 2023-24 was 42.1% and is forecasted to decline to 41.9% in 2024-25.
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In an interview with BNN Bloomberg on January 3, Gavin Graham, Chief Investment Officer and Portfolio Manager at Spire Wealth Management, discussed the investment landscape for 2025, particularly focusing on Canadian stocks. Graham acknowledged that Canada has been a market leader in cutting interest rates which provides them a much better position than their U.S. counterparts, specifically in sectors such as pipelines, utilities, REITs, telecom, and financials, which are interest-rate sensitive industries.
In the energy sector, Graham expressed a preference for natural gas companies which have performed well due to low cost structure and the potential for increased demand due to the anticipation of colder weather in the US. Despite the local weather-related volatility in North America, he sees a positive outlook for the sector due to the impact of geopolitical events, such as Ukraine ending its gas imports from Russia, which could further influence natural gas prices.
Graham also recommended that investors allocate 5 to 10% of their portfolios to gold, citing the robust performance of gold miners. He noted that while gold itself was up 27% last year, gold miners have underperformed relative to the metal and suggests that major gold miners have the potential to outperform. Gold mining stocks, being a leveraged play on the price of gold, could see significant gains if the gold price continues to rise and can offer attractive dividend yields and a hedge against economic uncertainty.
Canada’s economic outlook for 2025 appears optimistic, with moderate growth expectations, a stabilizing unemployment rate, and a declining interest rate along with the favourable federal debt-to-GDP ratio. Investors seeking diversification and high-growth potential should look at opportunities in undervalued sectors within the Canadian market. With that in context, let’s take a look at the 12 best Canadian penny stocks to buy according to analysts.
Our Methodology
For this article, we used Finviz and Yahoo stock screeners to find the 30 largest Canadian companies trading under $5 as of January 5. We then sourced the analysts’ average price targets and picked the 12 stocks that had the highest upside potential. We also included their hedge fund sentiment, which was taken from Insider Monkey’s Hedge Fund database of 900 elite hedge funds as of Q3 of 2024. The list is sorted in ascending order of analysts’ average upside potential as of January 5.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12 Best Canadian Penny Stocks to Buy According to Analysts
12. Denison Mines Corp. (NYSEAMERICAN:DNN)
Upside Potential: 104.76%
Stock Price as of January 5: $2.10
Number of Hedge Fund Holders: 23
Denison Mines Corp. (NYSEAMERICAN:DNN) is a uranium exploration and development company focused on projects in Canada’s Athabasca Basin. The company’s flagship Wheeler River Uranium Project is among the most promising undeveloped uranium assets globally.
Denison Mines Corp. (NYSEAMERICAN:DNN) is focusing on advancing the Phoenix deposit, located in the Wheeler River Uranium Project towards production. The company estimates that the initial capital costs to bring the deposit into production will be one of the lowest capital intensities in the industry. The company plans to use an in-situ recovery method which is expected to result in all-in production costs per pound of $16. This low-cost production profile, combined with the deposit’s proximity to existing infrastructure, makes the Phoenix deposit an attractive asset with robust economics.
Denison Mines Corp. (NYSEAMERICAN:DNN) is also exploring opportunities to increase the mine life and production potential of the Gryphon deposit, which is also part of the Wheeler River Project and is expected to be mined using conventional underground operations. The project is anticipated to add 49.7 million pounds of proven U3O8 to the project’s reserves.
11. Standard Lithium Ltd. (NYSEAMERICAN:SLI)
Upside Potential: 118.13%
Stock Price as of January 5: $1.60
Number of Hedge Fund Holders: 3
Standard Lithium Ltd. (NYSEAMERICAN:SLI) is a Canadian lithium exploration and development company advancing sustainable lithium extraction technologies. The company’s flagship projects including the Lanxess and the South West Project, both located in Arkansas, utilize innovative direct lithium extraction (DLE) technology. This approach allows for faster and more efficient lithium production to address the growing demand from the electric vehicle market and energy storage solutions.
Standard Lithium Ltd. (NYSEAMERICAN:SLI) is focusing on the advancement of its South West Arkansas project, which has received significant validation through a $225 million conditional grant from the US Department of Energy. The company is working closely with its partner, Equinor, to complete the Front-End Engineering Design (FEED) studies and move the project towards a final investment decision. To support this effort, Standard Lithium Ltd. (NYSEAMERICAN:SLI) is prioritizing the derisking of its business in an agreement with Koch Technology Solutions to use LSS technology and Direct Lithium Extraction (DLE) process to ensure lithium recoveries of at least 95%.
As Standard Lithium Ltd. (NYSEAMERICAN:SLI) moves forward with its South West Arkansas project, it is also exploring financing options to support the next phase of growth. The company is pursuing a range of funding sources, including offtake and customer financing, low-cost project debt, and parent company-level equity financing. The company is also committed to minimizing its cost of capital to deliver value to shareholders.
10. Uranium Royalty Corp. (NASDAQ:UROY)
Upside Potential: 135.74%
Stock Price as of January 5: $2.35
Number of Hedge Fund Holders: 7
Uranium Royalty Corp. (NASDAQ:UROY) is a Canadian-based company that specializes in acquiring and holding royalties on uranium properties, as well as investing in physical uranium. The company is known as the only pure-play uranium royalty company.
Uranium Royalty Corp. (NASDAQ:UROY) has a vast portfolio of royalties on projects in various stages of development, and while these assets may not generate revenue in the short term, they have significant potential for long-term growth. By investing in these projects and working with the operators to bring them into production, Uranium Royalty Corp. (NASDAQ:UROY) aims to create a pipeline of future revenue streams and increase its exposure to the growing demand for uranium. Uranium Royalty Corp. (NASDAQ:UROY) also has a significant interest in producing mines, such as the Cigar Lake Mine, where the company owns a sliding-scale net profit interest royalty.
Uranium Royalty Corp. (NASDAQ: UROY) recently acquired an existing royalty on the Millennium and Cree Extension Uranium Projects in Saskatchewan, Canada, from a third-party industrial gas company for $6 million. The acquired royalty is a 10% net profit interest (NPI) on an approximate 20.6955% participating interest in the projects, which are operated by Cameco Corporation Inc. The Millennium Project is an advanced-stage, conventional uranium project with estimated resources of 75.9 million pounds U3O8 in the indicated category and 29.0 million pounds U3O8 in the inferred category, making it one of the largest undeveloped uranium projects globally.
9. New Pacific Metals Corp. (NYSEAMERICAN:NEWP)
Upside Potential: 145.74%
Stock Price as of January 5: $1.29
Number of Hedge Fund Holders: 8
New Pacific Metals Corp. (NYSEAMERICAN:NEWP) is a Vancouver, Canada-based company focused on exploring and developing silver deposits in Bolivia. The company has a strong portfolio of projects, including the Silver Sand and Carangas deposits.
New Pacific Metals Corp. (NYSEAMERICAN:NEWP) is actively advancing its Silver Sand project, located 35 kilometers from the city of Potosi, Bolivia. The company has allocated funds for exploration expenditures on this project and has completed a Pre-Feasibility Study to ultimately bring the mine into production. The Pre-Feasibility Study indicates that the Silver Sand project will produce approximately 157 million ounces of silver over a 13-year mine life, at an average all-in sustaining cost (AISC) of $10.69 per ounce. This project has the potential to be a game-changer for New Pacific Metals Corp. (NYSEAMERICAN:NEWP), and the company is working diligently to secure the necessary permits and funding to bring it to fruition.
To further advance the Silver Sand project, New Pacific Metals Corp. (NYSEAMERICAN:NEWP) is working to complete an Environmental Impact Assessment (EIA) and secure the necessary environmental permits. The company is also engaging with local communities to finalize a resettlement and compensation plan, which is a critical step in the development process.
8. Bitfarms Ltd. (NASDAQ:BITF)
Upside Potential: 149.42%
Stock Price as of January 5: $1.72
Number of Hedge Fund Holders: 14
Bitfarms Ltd. (NASDAQ:BITF) is a global Bitcoin mining company that operates multiple facilities across North America and South America. The company focuses on low-cost, sustainable mining using hydroelectric power and generates revenue by selling Bitcoin on the open market.
Bitfarms Ltd. (NASDAQ:BITF) has been working to upgrade its fleet of miners, improve its operational efficiency, and diversify its portfolio beyond Bitcoin mining. As a result, the company focusing on expansion into the High-Performance Computing (HPC) and Artificial Intelligence (AI) sector. The company has been in active conversations with multiple parties to explore potential partnerships and hosting deals. According to Ben Gagnon, CEO of Bitfarms Ltd. (NASDAQ:BITF), the company is looking at revenues of over $100 per megawatt hour for HPC and AI deals, which is significantly higher than what they can generate from Bitcoin mining. The company has already identified two potential sites for a one to two-megawatt HPC and AI pilot, with one site having an expansion capacity of around 20 megawatts and the other with a triple-digit megawatt capacity.
As Bitfarms Ltd. (NASDAQ:BITF) moves forward with its HPC and AI strategy, the company is taking a prudent approach by starting with a small pilot project to test the waters and develop the necessary expertise. This pilot project will allow the company to evaluate the technology, infrastructure, and services required for HPC and AI, and to refine its approach before scaling up to larger projects.
7. Lithium Americas (Argentina) Corp. (NYSE:LAAC)
Upside Potential: 151.75%
Stock Price as of January 5: $2.86
Number of Hedge Fund Holders: 8
Lithium Americas (Argentina) Corp. (NYSE:LAAC), headquartered in Vancouver, Canada, focuses on the development of lithium projects in Argentina. The company’s Cauchari-Olaroz project is among the world’s largest lithium brine resources. Lithium Americas (Argentina) Corp.’s (NYSE:LAAC) strategic location and partnerships enable it to meet increasing global lithium demand driven by electric vehicle (EV) batteries and renewable energy storage solutions.
Lithium Americas (Argentina) Corp. (NYSE:LAAC) currently aims to optimize and expand its operations at the Cauchari-Olaroz lithium brine project in Jujuy Province, Argentina. The plant is currently operating at 75% to 80% of its nameplate capacity, and the company is confident in its ability to reach its full production capacity of 40,000 tons in the future.
Furthermore, Lithium Americas (Argentina) Corp. (NYSE:LAAC) is advancing Stage 2 at the Cauchari-Olaroz project. This stage involves expanding the plant’s capacity and improving operational efficiency. The company is also developing a regional development plan around the Pastos Grandes project in Salta Province, which will enhance the project’s economic and environmental impact. This development plan is expected to be completed in the coming months and will provide a comprehensive roadmap for future growth.
6. Gold Royalty Corp. (NYSEAMERICAN:GROY)
Upside Potential: 156.80%
Stock Price as of January 5: $1.25
Number of Hedge Fund Holders: 12
Gold Royalty Corp. (NYSEAMERICAN:GROY) is a precious metals-focused royalty and streaming company. The company provides capital to gold mining companies in exchange for royalty payments. Gold Royalty Corp. (NYSEAMERICAN:GROY) has a diversified portfolio across North and South America.
Gold Royalty Corp. (NYSEAMERICAN:GROY) has a number of exciting growth prospects that are expected to drive long-term value creation for shareholders. The company’s pipeline of development-stage assets, including the Odyssey mine and the South Railroad project, offer significant upside potential and are expected to start generating revenue in the coming years. Additionally, the company’s robust exploration portfolio, which includes assets such as the Whistler Project and the Tonopah West project, offers the potential for new discoveries and the creation of new royalties.
Furthermore, Gold Royalty Corp. (NYSEAMERICAN:GROY) is expecting significant revenue growth from its existing assets, particularly from the Cote Gold Mine in Ontario and the Vares Mine in Bosnia. The Cote Gold Mine, operated by IAMGOLD, is ramping up production and is expected to reach nameplate capacity in the coming months. Whereas, the Vares Mine, operated by Adriatic Metals, is expected to start generating revenue.
5. TMC the metals company Inc. (NASDAQ:TMC)
Upside Potential: 228.00%
Stock Price as of January 5: $1.25
Number of Hedge Fund Holders: 5
TMC the metals company Inc. (NASDAQ:TMC) specializes in exploring and extracting metals from the ocean floor. The company’s primary focus is on polymetallic nodules containing nickel, copper, cobalt, and manganese. TMC the metals company Inc. (NASDAQ:TMC) aims to supply critical minerals essential for electric vehicle batteries and renewable energy technologies.
TMC the metals company Inc. (NASDAQ:TMC) is developing a new services business for seafloor resource development. This initiative aims to leverage the company’s expertise and capabilities to provide services to other contractors and operators in the industry. The potential addressable market for this service is estimated at $100 million per year and is increasing substantially as the mining code is adopted. TMC the metals company Inc. (NASDAQ:TMC) is already in discussions with several parties on services contracts, covering areas such as new exploration plans, resource definition, environmental impact assessments, data management, and offshore campaign execution.
In addition to its services business, TMC the metals company Inc. (NASDAQ:TMC) is focusing on advancing its flagship project, NORI-D, towards exploitation. The company is preparing to submit its application for an exploitation contract to the International Seabed Authority (ISA) on June 27, 2025, and is working closely with its sponsoring state, Nauru, to ensure a smooth review process. TMC the metals company Inc. (NASDAQ:TMC) is confident that its application will be approved, given the strong environmental impact assessment and resource definition work that has been completed.
4. Galiano Gold Inc. (NYSEAMERICAN:GAU)
Upside Potential: 253.85%
Stock Price as of January 5: $1.30
Number of Hedge Fund Holders: 7
Galiano Gold Inc. (NYSEAMERICAN:GAU), headquartered in Vancouver, Canada, is a gold production and exploration company that operates and owns 90% of the Asanko Gold Mine located on the Asankrangwa Gold Belt in the Republic of Ghana, West Africa.
Galiano Gold Inc. (NYSEAMERICAN:GAU) is focusing on optimizing its operations at the Asanko Gold Mine. The company has made significant progress in ramping up mining operations at the Abore pit, with a 32% increase in tons mined and a 13% increase in gold production in the third quarter of 2024. The company is also investing in new equipment and technology, including a mobile crushing unit at the Abore pit, which is expected to improve fragmentation and increase haul truckload volumes. Additionally, Galiano Gold Inc. (NYSEAMERICAN:GAU) is progressing with the construction of a secondary crushing unit, which will enable the company to maintain above-nameplate levels even when processing harder fresh raw material.
Galiano Gold Inc. (NYSEAMERICAN:GAU) is also advancing its exploration pipeline, with drilling focused on the Sky Gold B and Abore North targets. A follow-up drilling program at the Abore North target has been defined and is scheduled to commence in the upcoming months. The company is also updating its global mineral reserves and resources, which will provide a clear picture of the company’s resource base and inform its life of mine plan. The report will be released to the market in early 2025.
3. Western Copper and Gold Corporation (NYSEAMERICAN:WRN)
Upside Potential: 286.36%
Stock Price as of January 5: $1.10
Number of Hedge Fund Holders: 5
Western Copper and Gold Corporation (NYSEAMERICAN:WRN) is a Vancouver-based copper and gold explorer and developer seeking to establish strategic copper and gold production on the Casino Mineral Property in Yukon, Canada. The company’s Casino project, offers low-cost production of several metals, including copper and gold, over many decades.
The Casino project is a key driver of Western Copper and Gold Corporation’s (NYSEAMERICAN:WRN) growth strategy. The project is expected to produce approximately 6.95 million ounces of gold, 36.09 million ounces of silver, and 4.27 billion pounds of copper along with 346 million pounds of molybdenum over the 27-year life of the mine. The company plans to develop the project in a phased manner, with the initial phase focusing on the development of the open pit mine and the construction of a 120,000 tpd processing plant.
To support the development of the Casino project, Western Copper and Gold Corporation (NYSEAMERICAN:WRN) is focusing on securing financing. The company has already made progress in this regard, completing a bought deal public offering for gross proceeds of $46 million and securing an additional $3.46 million financing with Rio Tinto Group. The company is looking for additional financing options, including debt and equity financing. Western Copper and Gold Corporation (NYSEAMERICAN:WRN) is also open to establishing partnerships with other mining companies and investors to support the development of the project.
2. AbCellera Biologics Inc. (NASDAQ:ABCL)
Upside Potential: 292.65%
Stock Price as of January 5: $3.13
Number of Hedge Fund Holders: 13
AbCellera Biologics Inc. (NASDAQ:ABCL) is a clinical-stage biotechnology company that has been making significant strides in the development of innovative antibody therapies. The company has a strong foundation in antibody discovery and development and has been transitioning to a clinical-stage biotech by focusing on advancing its internal programs and building its pipeline capabilities.
One of the key areas of focus for AbCellera Biologics Inc. (NASDAQ:ABCL) is its T-cell engager (TCE) platform, which has significant potential in the treatment of cancer. The TCE platform is a technology that enables the creation of bispecific antibodies that can selectively activate T-cells to attack cancer cells. The company believes that its TCE platform has the potential to be a game-changer in the treatment of cancer, and is investing heavily in its development.
AbCellera Biologics Inc. (NASDAQ:ABCL) has already demonstrated the efficacy of its TCE platform in preclinical studies and is now working to advance its lead TCE candidates into clinical trials. The company is also exploring the potential of its TCE platform in combination with other therapies, such as checkpoint inhibitors, to enhance its efficacy. With its TCE platform, AbCellera Biologics Inc. (NASDAQ:ABCL) is poised to make a significant impact in the treatment of cancer and is well-positioned to establish itself as a leader in the field of immuno-oncology.
AbCellera Biologics Inc. (NASDAQ:ABCL) is also prioritizing its internal programs, with a focus on advancing its lead assets, including ABCL635 and ABCL575, into clinical trials. The company is also investing in the development of a new industry-standard quality manufacturing facility and has established partnerships with major pharmaceutical companies, including Eli Lilly.
1. New Found Gold Corp. (NYSEAMERICAN:NFGC)
Upside Potential: 381.28%
Stock Price as of January 5: $1.87
Number of Hedge Fund Holders: 7
New Found Gold Corp. (NYSEAMERICAN:NFGC) is a gold exploration company based in Vancouver, Canada, The company owns a 100% interest in the Queensway Project. The company also recently acquired a 100% interest in the Kingsway Project. Both projects are located in the Canadian province of Newfoundland and Labrador.
New Found Gold Corp. (NYSEAMERICAN:NFGC) is focusing on advancing its Queensway Project towards feasibility studies and the commencement of gold production in the coming years. The company is currently working on a maiden resource estimate and preliminary economic assessment, which is expected to be completed in the second quarter of 2025. This study will provide a clear path forward for the project’s development and will help to define the company’s strategic development pathway.
Additionally, New Found Gold Corp. (NYSEAMERICAN:NFGC) is exploring opportunities to enhance its high-grade gold discoveries at the Kingsway Project and is committed to identifying more significant gold occurrences along the Appleton Fault Zone. The recent acquisition of the Kingsway Project, adjacent to the Queensway Project, provides the company with an additional 7,775 hectares. Drilling results in this area have indicated high-grade gold discoveries and a low-cost, long-term sustainable gold project.
While we acknowledge the potential of New Found Gold Corp. (NYSEAMERICAN:NFGC) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NFGC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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