The Motley Fool

4 small-cap stocks I’d buy now with $10,000

If you’re looking for a little extra bang for your buck in 2015, there are many small-cap ASX stocks which are currently offering compelling long-term value.

That’s because some fund managers and index funds are prohibited from investing in companies outside the S&P/ASX 300 (INDEX: ^AXKO) (ASX: XKO).

And as a result analysts aren’t paid to cover the stocks. Thus affording ordinary investors ample opportunity to get in before the professionals, sometimes at significantly cheaper prices.

So long as you’ve got a well-diversified portfolio with shares such as Woolworths Limited (ASX: WOW) forming the foundation and have a stomach for volatility, then I think it’s ok for investors to try their hand at a few smaller companies.

Right now, I’ve got four ultra-promising small-cap stocks on my 2015 watchlist. Two I already own (see my disclosure below) but would gladly buy again…

1. Netcomm Wireless Ltd (ASX: NTC) is a $58 million machine-to-machine (M2M) communications and broadband developer. After posting a 280% jump in profit in FY14, Netcomm’s share price has almost halved. That’s despite a bullish outlook for the year ahead and excellent long-term industry prospects.

2. Yellow Brick Road Holdings Ltd (ASX: YBR) is a junior diversified financial company with a rapidly growing branch network. Although it is not yet profitable, on November 25 the company released a business update detailing its integration of two recent acquisitions. Together with maturing branches, this bodes well for profitability in the near future.

3. Affinity Education Group Ltd (ASX: AFJ) is a childcare centre owner and operator. Shares in the $190 million company trade relatively cheap despite it recently reporting improved occupancy rates, a large acquisition and healthy increase in average fees.

4. Gage Roads Brewing Co Limited (ASX: GRB) is a brewing company located in Western Australia. Gage experienced a production mishap earlier in the year but things are now looking up. The $59 million company is 25% owned by Woolworths, which partners with it for exclusive brand sales.

Our #1 stock idea for 2015 – Yours FREE!

At today’s prices I think each of these four companies have the potential to deliver great returns for investors. Whilst I currently own Yellow Brick Road and Netcomm Wireless, the others are firmly on my buy list moving into 2015.

These 3 stocks could be the next big movers in 2020

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

*Returns as of 6/8/2020

Motley Fool Contributor Owen Raszkiewicz owns shares of Yellow Brick Road and Netcomm Wireless. You can follow Owen on Twitter @ASXinvest.

Related Articles...

Latest posts by Owen Raszkiewicz (see all)