One of the best-performing small-cap funds over the past five years has been the Ausbil Microcap Fund.

The fund predominantly invests in a portfolio of listed small and microcap Australian shares that are primarily chosen from outside the S&P/ASX 200 (Index: ^AXJO) (ASX:XJO).

The manager has a great track record of identifying small-cap shares that have the potential to grow into much larger companies and this has resulted in the fund returning, on average, 20.2% each year over the last five years and nearly 25% over the past 12 months alone.

Tony Waters, who is the portfolio manager for the Microcap Fund, recently conducted an interview with the Finance News Network where he highlighted a number of companies he believes will be able to deliver earnings growth above market expectations.

Six shares that he highlighted in the interview included:

Hansen Technologies Limited (ASX: HSN)

Hansen Technologies is a generally popular stock thanks to its recurring revenue business model and history of successfully integrating new acquisitions.

The company provides customer care and billing solutions to various utility companies in a number of different countries, many of which become ‘sticky’ customers. As the graph below shows, the combination of recurring revenues and new acquisitions has produced above average revenue and earnings growth.

Source: Company Presentation

Source: Company Presentation

 

Blackmores Limited (ASX: BKL) and  a2 Milk Company Ltd (Australia) (ASX: A2M)

Although Blackmores and a2 Milk are no longer top holdings for the Microcap Fund and no longer small companies, the fund manager is still positive on both companies and believes both are still at the early stages of their growth into the Chinese market.

The valuations for both companies have also fallen recently.

oOh!Media Ltd (ASX: OML) and APN Outdoor Group Ltd (ASX: APO)

Although both stocks have performed extremely well over the past 12 months, the fund manager believes the outdoor advertising sector remains attractive.

Unlike other traditional advertising segments like print and television, the outdoor segment is showing strong levels of growth (highlighted below) and is benefiting from innovations such as digital billboards.

Source: APN Outdoor Company Presentation

Source: APN Outdoor Company Presentation

Another company in this sector investors may be interested in that has also performed well over the past 12 months is QMS Media Ltd (ASX: QMS).

RCG Corporation Limited (ASX: RCG)

RCG has been one of the top performing retail shares over the past few years and has become a top holding for the Microcap Fund.

The company owns a number of footwear and distribution businesses including The Athlete’s Foot and Platypus Shoes.

RCG has shown phenomenal earnings growth over recent years and expects to increase its FY16 earnings per share (EPS) by between 40%-45%.

The shares have taken a bit of a breather since the start of the year and now trade on a relatively attractive forward price-to-earnings ratio of around 22.

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Motley Fool contributor Christopher Georges owns shares of RCG Corporation. The Motley Fool Australia owns shares of Hansen Technologies. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.