As we head into the second half of 2025, the Canadian market is closely watching developments in tariff and trade negotiations, particularly between the U.S. and China, which could influence economic growth and inflation. In this context of evolving global trade dynamics, investors might consider exploring opportunities beyond well-known stocks. Penny stocks—though an older term—remain relevant as they often represent smaller or newer companies with potential for growth; when backed by strong financial health, these stocks can offer surprising value and stability amidst broader market uncertainties.

Click here to see the full list of 889 stocks from our TSX Penny Stocks screener.

Let's dive into some prime choices out of the screener.

★★★★★★

Canaf Investments Inc., with a market cap of CA$16.60 million, owns and operates a coal processing business in South Africa.

Canaf Investments Inc. does not report any distinct revenue segments.

CA$16.6M

Canaf Investments Inc., with a market cap of CA$16.60 million, demonstrates financial stability through its short-term assets (CA$14.1M) exceeding both short-term liabilities (CA$3.4M) and long-term liabilities (CA$8.5K). The company is debt-free, reducing financial risk, and has shown consistent earnings growth over the past five years at 29.3% annually, although recent growth slowed to 1.6%. Despite this deceleration, net profit margins improved from 6.7% to 7.6%. Trading significantly below estimated fair value suggests potential undervaluation, while stable weekly volatility indicates manageable risk levels for investors in penny stocks.

★★★★☆☆

Overview: Thermal Energy International Inc. develops, engineers, and supplies pollution control products, heat recovery systems, and condensate return solutions across North America, Europe, and internationally with a market cap of CA$24.24 million.