I have a few other ASX shares on my watchlist, but Pro Medicus Limited (ASX: PME), Gentrack Group Ltd (ASX: GTK), Class Ltd (ASX: CL1) and Praemium Ltd (ASX: PPS) are my favourite small cap shares right now.
Pro Medicus
Pro Medicus is a health technology company that has developed software used by radiologists and doctors. Basically, the company's Visage software enables health experts to get medical images, like X-rays, on their smartphone.
Some of these files are massive — sometimes more than 2 Gigabytes for one file — yet are transferred to a mobile phone in seconds. Interestingly, it is the screens on some phones holding back the technology — they are not clear enough to meet regulatory standards.
Pro Medicus shares are not cheap at today's levels, but they hold plenty of long-term potential.
Gentrack Group
Gentrack is a software developer — like all the others on this list. The company develops programs used by airports and energy companies to bill clients, monitor and operate assets. The software is deeply embedded in company processes and systems making Gentrack's revenue very consistent.
Gentrack shares shot higher recently after the company announced the acquisition of Junifer Systems in the UK. The company is a leading developer of systems for energy and utility companies, having grown rapidly in recent years. The acquisition will greatly enhance the reach and presence of Gentrack throughout the UK and Europe.
Class
Class makes software for accountants and financial advisers. The software brings together all the reporting and legal requirements used by these professionals to administer self-managed superannuation funds (SMSFs) and investment portfolios.
The company has experienced strong growth in recent years at the expense of competitors. With a long runway for growth in Australia's financial system, Class's software is unlikely to lose relevance anytime soon.
Praemium
Praemium is a fellow wealth management business. Praemium has created a platform for investment professionals and advisers to connect with clients in a tax-effective structure. Investors can create accounts and follow the strategies of investment professionals. Praemium collects a fee from investors using the software.
The company has experienced rapid growth in funds under advice and investor accounts, as the favourable tax structure provided by these accounts catches on with the investment community.
