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Forget Woolworths Limited and buy these 4 explosive small caps instead

So far in 2016 many of the big blue chip shares we all know and love have failed to deliver for investors. Normally reliable shares such as Woolworths Limited (ASX: WOW), Telstra Corporation Ltd (ASX: TLS), or the big four banks have thoroughly underperformed, no doubt leaving many investors frustrated.

With many of its biggest shares offering little by way of share price gains this year, the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has only managed to carve out a gain of around 3.5% year-to-date.

But at the other end of the market the Small Ordinaries (Index: ^AXSO) (ASX: XSO) has been a completely different story. So far this year the index has put on a gain of over 13% thanks to strong performances from many of Australia’s small cap shares.

Here are four small cap shares which have been explosive:

DTI Group Ltd (ASX: DTI)

DTI is a provider of integrated surveillance systems and fleet management solutions for the mass transit industry worldwide. Its shares have surged over 30% in 2016 thanks in part to a series of key contract wins. A couple of the most recent contracts are to supply its systems for metro police vehicles in South Africa and the rail systems of US cities Philadelphia and Dallas. Management has stated that it has a global list of prospects standing at around $388 million at present, which could keep this fledgling company growing for a long time to come.

Money3 Corporation Limited (ASX: MNY)

Shareholders of this Australian credit provider for personal and car loans have seen the value of their holdings increase by over 54% in 2016. Recently it secured a $20 million debt facility which management plans to use to maintain the strong growth momentum of its secured automotive loan business. The company is growing strongly and is expecting full year profit to come in 36% higher than last year at $19 million. According to CommSec its shares are expected to provide a fully franked 4.5% dividend in FY 2017.

Nearmap Ltd (ASX: NEA)

The share price of this growing photo mapping software-as-a-service company has soared by 35% in 2016. There’s a lot of optimism around the company at the moment after it announced the successful implementation of its HyperCamera2 initiative. The new aerial mapping technology is expected to vastly increase the capability of its product offering and reduce the costs of capturing data. The key to growth in my opinion will be its US operations. I have been pleased with its progress since it implemented a paywall in the region, and believe sales could grow at a rapid clip in FY 2017.

Praemium Ltd (ASX: PPS)

Praemium is a growing fintech company which provides software platforms for investment administration, separately managed accounts, and financial planning. Its share price has risen over 30% in 2016, with a lot of these gains coming after it announced that it had signed up leading wealth management firm JBWere. In its half year results the company delivered revenue and other income of $14.7 million, which was a 35% increase on the same period in FY 2015. I feel this level of growth can continue for some time, which I think makes Praemium a great option for growth investors.

Finally, before you make an investment I would highly recommend you check to see if you own one of these three rotten ASX shares. Each could be harming your portfolio and stopping it from reaching its potential.

3 Rotten Shares to Sell, and 1 to Buy Today

After a double-digit rally for the ASX since 2016 lows, investors should be on high alert. You'll find a full rundown below of 3 shares we think you should avoid today plus one top pick worth buying, even if the market turns south and the RBA keeps rates at an "emergency low." Simply click here to uncover these stocks.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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