Even giant companies like Woolworths Limited (ASX: WOW) which now boasts a market capitalisation (market cap) of $41 billion were small once upon a time. It's this ability to sustain long-term growth which is in many ways the 'Holy Grail' of investing.
The following four companies all have market caps of less than $1 billion – which suggests they are still relatively small – and they all operate in industries where the companies have the potential to get much, much bigger. Here are four stocks which have the potential to grow into future leaders.
- Amcom Telecommunications Limited (ASX: AMM) has a market cap of $762 million and has produced total shareholder returns (TSR) of 45% and 54.3% per annum (pa) over the past one and three years respectively (according to data provided by the Australian Financial Review.) As a leading mid-tier Australian telecommunications provider, Amcom has the scope to continue to grow much larger as demand for data volumes continue to rise. Amcom is also due to merge with rival internet business Vocus communications soon.
- Clearview Wealth Ltd (ASX: CVW) has a market capitalisation of $529 million. With operations across life insurance, wealth management and financial advice solutions, the group operates in a sector that allows for a long runway of growth opportunities. Over the past one and three years, Clearview has produced a TSR of 33.9% and 35.7% pa.
- Select Harvests Limited (ASX: SHV) has a market capitalisation of $470 million. The group is a significant food manufacturer and almond producer which positions the company to benefit from significant growth in demand from China for protein. Select Harvests has achieved a TSR of 13.5% and 59% pa over the past one and three years respectively.
- Capitol Health Ltd (ASX: CAJ) has seen its market capitalisation soar to $427 million thanks to a TSR of 91% and 198% pa over the past one and three years respectively. As a relatively small but growing consolidator in the diagnostic imaging sector, Capitol has scope to expand beyond its home state of Victoria and become a national provider.
