If you are like me and you haven't owned any resources shares over the past six months, your portfolio is probably looking a little bit gloomy.
Small-cap shares in particular have been hit pretty hard, along with some of the market's former darlings like Vocus Communications Limited (ASX: VOC) and Blackmores Limited (ASX: BKL).
While some investors might be tempted to rotate into the resources sector right now, I feel as though that is a strategy fraught with danger.
Instead, I think investors should remain focused on buying high quality companies that aren't exposed to the cyclical nature of commodity prices.
With that in mind, here are three small-cap shares that I think could offer great returns over the course of 2017:
Capilano Honey Ltd (ASX: CZZ)
Capilano shares have been caught up in the wave of selling that has impacted so many of the companies with exposure to the Chinese consumer. However, the sell-off appears to be overdone when you consider that less than 15% of the company's total sales are derived from the retail export market. Furthermore, the honey producer continues to launch new products which should drive revenue and earnings growth in the short-to-medium term.
RCG Corporation Ltd (ASX: RCG)
RCG is one of the better retail shares on the ASX and has a proven track record when it comes to delivering growth organically and through acquisition. The company owns a number of leading athletic and leisurewear brands and is forecasting extremely strong growth in FY17. If RCG can deliver on its growth targets, the company's current earnings multiple of around 20x look quite cheap.
Webjet Limited (ASX: WEB)
Webjet is one of the shares that has been hit particularly hard by the recent rotation out of small caps and into the resources sector. Despite this, the company continues to tick all the right boxes operationally and recently issued an impressive trading update that revealed strong growth across all of its business units. The shares are now trading at a 20% discount to their 52-week highs and I think could easily find themselves back in favour in 2017.
