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3 exciting small-cap shares I would buy in May

I believe the S&P/ASX SMALL ORDINARIES (Index: ^AXSO) (ASX: XSO) is home to a number of high-quality small-cap shares with extremely bright futures.

Three shares which I think are standout picks on the index at the moment are listed below. Here’s why I think they could be in the buy zone today:

BWX Ltd (ASX: BWX)

Thanks to the growing popularity of its Sukin skincare range, I believe BWX is a great option for buy and hold investors. Earlier this year BWX posted a 30.2% jump in half-year net profit after tax to $8.2 million. Pleasingly, as well as strong sales growth, the strong bottom line result was partly due to improvements in its gross margin. Management’s plan to transition its product mix away from low margin, low volume products appears to have paid off. With the company expanding its presence in the UK market and in China through online marketplaces, I believe there is plenty more earnings growth ahead for BWX.

Class Ltd (ASX: CL1)

I believe this cloud-based software provider for self-managed superannuation fund (SMSF) accounting has a very bright future. Last month the company advised that it now has 132,873 SMSFs on its Class Super platform. This equates to a 68% share of the cloud market. But with management estimating that just 28.2% of all SMSFs are managed in the cloud, the company clearly has a long runway for growth. Especially considering the company’s ability to win customers. Class captured 80% of all SMSF migrations to the cloud in FY 2016.

National Veterinary Care Ltd (ASX: NVL)

Recent research by the RSPCA estimates that pet ownership in Australia has grown to a massive 63% of Australian households. With such high levels of pet ownership I believe demand for veterinary services is likely to grow strongly in the future. This is great news for National Veterinary Care and its growing network of veterinary businesses. But it’s not just organic growth taking the company forward. The veterinary market is highly fragmented and provides the company with significant opportunities to grow through acquisitions.

Finally, whilst small-caps are great, I do believe in a balanced portfolio. With that in mind I would suggest investors also look at these fast-growing blue-chips.

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks means stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

If you're expecting to see the likes of Commonwealth Bank, Telstra and Wesfarmers shares on this list, you'll be sorely disappointed. Not only are their dividends growing at a snail's pace, their profits are under pressure too due to the increasing competitive environment.

The contrast to these "new breed" blue chips couldn't be greater... especially the very real prospect of significant share price gains, something that's looking less likely from the usual blue chip suspects.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of BWX Limited and Class Limited. 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.

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