One of the benefits of investing in small-cap shares is the fact that many of them are overlooked by institutional and professional investors due to size or liquidity restrictions.
Fortunately, retail investors are not bound by these same restrictions and this provides them with a great opportunity to find undervalued and under-followed shares.
With that in mind, here are three small-cap shares that might be flying under your investment radar:
Pioneer Credit Ltd (ASX: PNC)
Pioneer Credit is a financial services company that specialises in purchasing and servicing retail debt portfolio’s mainly from Australia’s major banks. The $104 million company recently delivered another record interim result that showed a 17% increase in earnings per share. The outlook for Pioneer Credit remains strong and management expects to deliver full year earnings of at least $10.5 million. This means the shares are currently trading on a very undemanding price-to-earnings (P/E) ratio of less than 10, and also offering a attractive dividend yield of nearly 5%.
3P Learning Ltd (ASX: 3PL)
3P Learning has fallen off the radar of most investors following a disappointing performance over the last 18 months. However, the outlook for the business is looking far more positive under the leadership of its new CEO who is focused on implementing a turnaround strategy aimed at driving operating costs lower. Importantly, 3P Learning has a strong development pipeline of new products and this should help the $134 million education company to grow its top and bottom line numbers over the coming years.
IVE Group Ltd (ASX: IGL)
IVE Group is a $283 million company that specialises in print and marketing communications services and holds market leading positions across a number of industry sectors. Admittedly, investors should not expect a huge level of organic growth from the company, but there is a significant opportunity for consolidation in the segment that will provide IVE with the potential for further growth through acquisition. Importantly, the shares trade on a P/E ratio of less than 10 and offer a very attractive dividend yield of around 6.5%
Where to invest $1,000 right now
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*Returns as of February 15th 2021
Motley Fool contributor Christopher Georges owns shares of 3PLEARNING FPO and Pioneer Credit. 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.