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2 small cap rockets to buy in October

When it comes to growth shares there is one share in particular that will no doubt spring to the mind of many investors. That is of course Domino’s Pizza Enterprises Ltd (ASX: DMP).

The rapidly expanding pizza chain operator has deservedly earned its reputation by growing its earnings at an average rate of 25.2% per annum for the last decade according to CommSec.

As you might expect during that time it has rewarded its shareholders handsomely with an average annual total return of 40.2%. This staggering level of return means that if you had invested $35,000 in its shares back in 2006 you’d be a millionaire today.

Finding the next star growth share is of course an almost impossible task. But two small-cap growth shares which I feel have incredible potential are as follows:

Appen Ltd (ASX: APX)

Appen is a global leader in the fast-growing speech and search technology services industry and in my opinion one of Australia’s most exciting technology companies. Any company that can name global giants Facebook and Microsoft as clients is clearly doing something right and I think this shows in its results. In August Appen delivered a stunning 102% increase in half year net profit to a record $5.4 million. The company recently acquired UK-based Mendip Media Group with the aim of enhancing the provision of language services to government clients. Whilst Mendip Media is a much smaller company it does have contracts with the United Nations, Ministry of Justice and a number of security agencies.

Catapult Group International Ltd (ASX: CAT)

Sports analytics company Catapult is another company which has been busy with acquisitions recently. The company acquired US-based XOS Technologies and Ireland’s PLAYERTEK this year to bolster its product offering and cement its position as one of the industry leaders. The XOS Technologies deal in particular appears to be a great choice by management. It provides digital and video analytic software solutions to sports teams and should complement Catapult’s existing products. Positively the acquisitions are expected to generate significant synergies and accelerate Catapult’s transition to positive EBITDA and free cash flow in FY 2017.

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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.