There are plenty of tiny companies out there with big potential, but how do investors pick those that will be successful?
To pick winners accurately is arguably more art than science in the micro-cap end of the market and investors need to do substantial qualitative research, tyre kicking, and competitor analysis.
The following three stocks all have market capitalisations under $70 million, exciting technology and potential to reach much higher levels.
Quickstep Holdings Ltd (ASX: QHL): Market cap $69.6 million
Quickstep has developed technology allowing for the speedy, accurate and high durability manufacturing of composite components for industries including automotive and aerospace. So far its major orders have come from large projects connected with the U.S. and Australian Air force including the high profile Joint Strike Fighter for which the company is manufacturing parts.
Bluechiip Ltd (ASX: BCT): Market cap $9 million
Bluechiip has developed a novel wireless tracking solution which has numerous applications and does away with the need for labels, bar codes or radio frequency identification devices (RFID). The company is still in the early stages of gaining acceptance, but has a potential customer base which includes the healthcare, defence and logistics industries.
Atcor Medical Holdings Limited (ASX: ACG): Market cap $14.2 million
Atcor has developed the SphygmoCor system which it describes as the “global gold standard in diagnosis and patient management, pharmaceutical clinical trials and research.” The system provides a quick and non-invasive method for obtaining data such as central blood pressure and arterial stiffness. It’s difficult to predict the outcome of this system but the market potential would appear very large.
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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.