I think in order to find outsized returns in 2017 investors might be best looking beyond the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) at some of Australia's rising smaller companies.
Four companies which I believe are flying under the radar right now and could be set for a great 2017 are as follows:
Murray River Organics Ltd (ASX: MRG)
This recently listed organic healthy snacks company has its eyes firmly fixed on the estimated $104 billion a year global certified organic food and drink market. Around two-thirds of the company's sales come from the Australian and New Zealand market, but I believe the engagement of sales teams internationally should prove to be a boost to its exports moving forward. Sales representatives have now been engaged in Europe, North America, China, and Japan. I believe this should help provide the company with significant growth over the next few years. So with its shares changing hands at around 17x forecast FY 2017's earnings as per its prospectus, I think the company is a great option for investors.
Nanosonics Ltd. (ASX: NAN)
If the start of FY 2017 is anything to go by, then Nanosonics is set for a sensational year. The infection prevention specialist recently reported first quarter sales which were up 174% on the prior corresponding period to $17.8 million. This increase was the result of growing demand for the company's trophon EPR product. Nanosonics' environmentally friendly trophon EPR is effective at disinfecting ultrasound probes, whereas current toxic disinfectants being used are largely ineffective. I believe this gives the company a competitive edge in this small, but lucrative market.
National Veterinary Care Ltd (ASX: NVL)
As the name implies National Veterinary Care provides veterinary services through its growing network of 50 clinics throughout Australia and New Zealand. Although at this stage the company is far smaller than rival Greencross Limited (ASX: GXL), it certainly isn't lacking in ambition. Due to the industry being largely fragmented, management sees the potential for significant growth by acquisition. Considering a number of the management team came to NVC from Greencross, I wouldn't bet against them achieving this.
Viralytics Ltd. (ASX: VLA)
Viralytics is an exciting company that aims to take the common cold virus and use it to fight both melanoma and non-muscle invasive bladder cancer. Based on a proprietary cold virus, CAVATAK, is a novel cancer immunotherapy that has been shown to preferentially infect and attack cancer cells by enhancing the body's own defences. So far results have been promising and management believes there are opportunities for CAVATAK in multiple settings including combinations with new agents. According to a recent presentation Credit Suisse estimates the immuno-oncology market to be worth US$42 billion per annum. It is still early days and a high risk investment, but I see enormous potential for the company if things go to plan.
