13 Best Canadian Penny Stocks to Invest in Now

7. Mercer International Inc. (NASDAQ:MERC)

Closing Stock Price as of April 17^th: $4.96

Number of Hedge Fund Holders: 22

​Mercer International Inc. (NASDAQ:MERC) is a forest products company producing market pulp, solid wood products, and bio-based materials in its fields located across Canada, the US, and Germany. The company’s strength consists of vertical integration and large-scale operations, featuring a combined annual capacity of more than 2 million tons. The solid wood segment produces lumber, cross-laminated timber pallets, and biofuels. MERC ranked seventh on our recent list of 10 Best Paper Stocks to Buy According to Hedge Funds.

Mercer International Inc. (NASDAQ:MERC) reported a significant improvement in Q4 2024 with operating EBITDA of $99 million compared to Q3’s $50 million, driven by no planned maintenance downtime, a strong dollar, and higher sales volumes. For the full 2024 fiscal year, EBITDA increased substantially to $244 million from $17 million in 2023, attributed to stronger pulp markets, lower production costs from easing inflation pressures, and cost reduction initiatives. The company successfully redeemed $300 million of 2026 senior notes using $200 million of additional 2028 senior notes and $100 million cash, marking a first step in its leverage reduction initiative.

Looking ahead, Mercer International Inc. (NASDAQ:MERC) expects softwood pulp pricing to remain strong due to reduced supply and steady demand, while the significant price differential between softwood and hardwood pulp is expected to persist well into 2025. The company faces potential challenges from tariff uncertainties but believes it can mitigate the majority of impacts through operational flexibility and sales strategies. Management’s absolute priority for 2025 will focus on reducing leverage through strategic projects, including aggressive cost reduction programs, reliability improvements, operational rationalization, and prudent capital management. The long-term visibility and optimistic guidance reinforce our belief that MERC is one of the best penny stocks to buy.