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3 small-cap stocks that could set the world on fire

Investors hoping to strike it rich on the stock market are going to have to look beyond the lure of the big four banks or supermarket giants and instead look towards the smaller end of town where some of tomorrow’s superstars are hiding.

Unlike Australia’s blue chip corporations, the nation’s small-cap stocks have the capacity to grow earnings and revenues at rates which can have enormous effects on their share prices. Just look at Liquefied Natural Gas Limited (ASX: LNG) as a perfect example. The stock was trading at 17.7 cents 12 months ago, but has since surged a remarkable 2,273% to be trading at $4.20.

While I can’t guarantee their returns will be that impressive, I do believe these three small-caps could deliver some impressive results for shareholders in the years to come.

Shine Corporate Ltd (ASX: SHJ)

Shine Corporate is a junior Australian law firm I recently acquired shares in (coincidently, it was also named by two of my colleagues as their best stock to buy in September). The company has fantastic potential in Australia’s growing Personal Injury market while it is also exploring other practice areas like environmental law and professional negligence. As it expands geographically around Australia, this stock could be a big winner for investors who buy today.

Nearmap Ltd (ASX: NEA)

Perhaps ‘exciting’ is an understatement for this company, given that it has skyrocketed a massive 900% since the beginning of 2013. Although it would have been nice to have bought some shares back then, I believe its best years are still ahead of it. Nearmap is a provider of geospacial map imagery which is proving incredibly useful across various sectors, saving businesses time, costs and resources. An expansion into the U.S. (and potentially other markets too) could see revenues skyrocket in years to come. I’m happy to say I bought shares when they were trading at 44 cents and I’m already sitting on a very nice gain.

Onthehouse Holdings Ltd  (ASX: OTH)

The company has a first mover advantage in an area not yet tapped by key competitors REA Group Limited (ASX: REA) and Fairfax Media Limited (ASX: FXJ) in that its onthehouse.com.au website provides more in-depth data regarding property histories and valuations – regardless of whether or not the property is up for sale. As the company continues to pump money into developing its platforms, this could be a fantastic long-term buy-and-hold prospect for savvy investors.

Another small-cap superstar you need to know about

Unlike Shine Corporate and Nearmap, I don't own shares in Onthehouse. It's sitting firmly atop my watchlist and could be amongst my future investments. Another stock I already own is also growing very strongly. With fantastic future prospects and a fat, fully franked dividend, this stock has our top analysts so impressed they even named it "The Motley Fool's Top Stock for 2014."

Don't miss what could be the 'story stock' of 2014! Simply click here now to get The Motley Fool's #1 pick in our newly updated investment report. It's yours FREE!

Motley Fool contributor Ryan Newman owns shares in Nearmap Ltd and Shine Corporate Ltd.

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