5 small-cap shares I’m tipping to shine in 2017

Although it has dropped off a touch in the last couple of months, the S&P/ASX SMALL ORDINARIES (Index: ^AXSO) (ASX: XSO) has still managed to outperform its illustrious rival the S&P/ASX 200 with a 6% gain year-to-date.

With such a high number of quality small-cap shares on the Australian market, I wouldn’t be surprised to see this outperformance continue in 2017. As a result I believe investing in a few small-cap shares could be a great way to give your portfolio a lift next year.

Here are five small-cap shares which I’m tipping to shine:

Appen Ltd (ASX: APX)

Appen is a global leader in speech and search technology services with some of the world’s biggest technology companies such as Facebook and Microsoft on its books. Not only does it have enormous growth potential, but it also has a debt-free balance sheet. Quite a refreshing change in the tech industry.

Apollo Tourism & Leisure Ltd (ASX: ATL)

This vertically integrated manufacturer, rental fleet operator, wholesaler, and retailer of recreational vehicles listed on the stock exchange just over a month ago. Its shares are changing hands at just 15x forecast full year earnings, which I believe represents great value. Especially with Australia being at the start of an inbound tourism boom.

Bionomics Ltd (ASX: BNO)

Whilst Bionomics has a number of potentially lucrative drugs in its development pipeline, the key attraction to the biopharmaceutical company for me is its BNC210 anxiety drug. The anxiety treatment market is estimated to be worth up to US$18.2 billion per year by 2020. So far trials have delivered very promising results.

ChimpChange Ltd (ASX: CCA)

This fast-growing US-based digital banking business could have a bright future ahead of it. Last month the company reported yet another record-breaking month with 7,000 new customers added. With a host of innovative new features on the way designed to help customers understand their spending habits and help them save, I believe ChimpChange is a company on the rise.

Capilano Honey Ltd (ASX: CZZ)

This Australian honey producer had a great FY 2016 which saw net profit jump 20.9% to $9.5 million. A key driver in this strong result was the growth in exports to China. The company reported a 56.9% jump in sales in the country year on year. Pleasingly I feel confident China will provide Capilano with strong growth for a number of years to come, making it a great time to invest.

If you'd prefer to invest in blue chip shares then don't miss out on these hot stocks. The smart money is on them being big winners in 2017. Is yours?

Big, Fat, Dividends

This company's dividend is almost the stuff of legends. Its reliable cash flows support a high payout ratio, and the company's stash of franking credits are the cherry on the top of the dividend cake. Based on the last 12-months of dividends, shares are offering a fully-franked 6.5% yield, which grosses up to a whopping 9.3%, when those franking credits are included.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Capilano Honey Limited. 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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