In a well balanced stock portfolio, I don't see anything wrong with having a few speculative investments.
Three small companies at the top of my watchlist (or in my portfolio) are Netcomm Wireless Ltd (ASX: NTC), ADMEDUS FPO (ASX: AHZ) and Yellow Brick Road Holdings Ltd (ASX: YBR). Here's why.
Netcomm, a micro-cap technology company, recently announced a 50% increase in revenues and 287% increase in profit. The group's transition to machine-to-machine (M2M) communication has obviously paid-off and looks set to continue doing so. Thanks to a big revenue boost from smart metering, M2M now accounts for 51% of the $65 million company's top line.
Admedus, a junior biotechnology company with its headquarters in Perth, today announced some "encouraging" results from its Phase I Herpes Simplex Virus (HSV-2) vaccine study. However, the group's innovative CardioCel tissue repair technology is what most investors are keeping a close eye on. Already being sold in a number of foreign markets, CardioCel is a patch which can used for applications in heart surgery. With its new manufacturing facility now open, the company believes it will be able to meet the expected demand from multiple international markets.
Yellow Brick Road, like the two above, is also building scale. Although currently unprofitable, the wealth management firm operated by Mark Bouris is rapidly expanding its branch network and believes profits can be expected as more of the businesses mature in the near future. Dropping 8% in the past month, I think its share price offers a compelling investment for those willing to take on a little extra risk.
Buy, Hold, or Sell?
Of the three companies, I think Admedus is probably the riskiest, but, arguably holds the greatest upside potential. The only one I don't own is Netcomm, but I think it is very tempting.
