Value Investing is a proven strategy with which you can achieve steady returns over time. However, it is crucial to develop a portfolio that consists of companies that act under their intrinsic value, but can consistently increase income and income.
In this article I have identified two undervalued TSX shares That trade under $ 20, who could consider Canadian investors to add to their tracking list in August 2025. Let’s see why.
Is this TSX share a good buy?
NFI group (TSX: NFI) delivered robust results from the second quarter, with Momentum in his operational recovery. The Canadian bus and coach manufacturer achieved an increase of 19% on an annual basis in three-monthly adjusted EBITDA (profit for interest, tax, depreciation and amortization) and an improvement of $ 7.6 million in adapted net income, while the return on invested capital increased by 7.9%.
NFI secured 822 equivalent units in new orders during the second quarter, with 95% fixed orders, which brought the total backlog to 16,198 units worth $ 13.5 billion. Strong demand is still controlled by support from the government in North America, with production slots that are now sold well in 2026 and options that extend until 2030.
NFI has made progress with regard to the disruption of the chair supply, causing incomplete buses to miss the seats to only 56 units from July 18, at peak levels in November. A new Buy America-Compliant Seat supplier started to deliver during the quarter, which offered extra supply chain diversification and the dependence on the challenged supplier reduced to around 30-35% of the total seat requirements.
NFI completed an extensive refinancing, the establishment of a new four-year first Lien facility of $ 700 million and gave $ 600 million to second lien. This refinancing improved liquidity to $ 326.7 million, improved covenants and lower interest costs and offer more financial flexibility.
The production of gross margins improved year-on-year to 10.6% compared to 8%, which reflects a better disadvantage profile and prices. NFI confirmed its guidelines of $ 3.8-4.2 billion in income and $ 320-360 million to adapted EBITDA.
However, the company has announced a consultation process for consolidating Scottish production activities to tackle competing pressure from Chinese imports on the British market, which represent around 15% of the quarterly sales.
The TSX shares are predicted on 2026 with an adjusted profit of $ 1.21 per share, compared to a loss per share of $ 1.27 in 2024. If NFI shares are priced at 20 times for income, which is reasonable, it can win almost 35% in the coming 12 months.
Is this TSX shares undervalued?
Mattr Corp (TSX: Matr) reported robust results of the first quarter, with the turnover of continued operations with 52% on an annual basis to $ 320.1 million and adapted EBITDA increase from 80% to $ 46.6 million. The strong performance was powered by the successful integration of newly acquired design and operational improvements in the modernized production print of the company.
The segment of the connection technologies achieved record results, in which the turnover increased more than 100% and adapted EBITDA by more than 70% versus the previous year. The inclusion of Amerercable has contributed to this profit, while DSG-Canusa continued to conquer the market share in industrial and automobile markets, despite the falling global vehicle production.
The turnover of composite technologies increased by 11% on an annual basis, powered by a strong demand for fuel storage and water management products from Xerxes, in particular in Datacenter applications. FlexPipe continued to obtain the American market share despite the industry, so that new income records were recorded in the American markets.
MATTR, however, faces the short -term challenges of rate -related uncertainty, so that some customers have postponed the purchasing decisions. The material technology company benefited documents in the first quarter of the acceleration of the customer order prior to potential tariff implementations, but expects consecutive decreases in Q2 performance, since market uncertainty persists.
Management maintains trust in long -term growth prospects, supported by favorable electrification trends and critical infrastructure investment needs.
With a strong balance sheet and disciplined capital allocation aimed at debt reduction and stock shopping, Mattr seems to be well positioned to navigate to navigate current uncertainties and at the same time take advantage of underlying market opportunities.
Bay Street predicts Mattr to increase its free cash flow (FCF) to $ 168 million in 2029, an increase of only $ 19.3 million in 2025. If the TSX shares are priced at only 10 times ahead of FCF, it would more than double in the coming four years.
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