3 small-cap shares to watch in FY 2018

As well as blue chip favourites like CSL Limited (ASX: CSL) and Telstra Corporation Ltd (ASX: TLS), the Australian share market has a good number of small-cap shares that I believe are deserving of a spot in the average investor’s portfolio.

Three which I think are worth considering today are listed below. Here’s why I like them:

National Veterinary Care Ltd (ASX: NVL)

With pet ownership at high levels and management estimating that on average 79% of dogs and 65% of cats go to the vet at least once a year, I believe this veterinary company has a bright future ahead of it. Especially as the market is still largely fragmented, presenting it with the opportunity to accelerate its growth through acquisitions.

Noni B Limited (ASX: NBL)

Although this retailer’s shares have gone gangbusters this year, I don’t believe it is too late to consider an investment. Noni B and its numerous brands are focused on the mature end of the female clothing market, which I believe is less likely to be disrupted by online retailers. Thanks partly to the acquisition of the Pretty Girl brand, Noni B posted a 142% increase in revenue to $143 million. Pleasingly, the company continues to expect its margins to expand further over the next 12 months.

Think Childcare Ltd (ASX: TNK)

With its shares down almost 9% year-to-date, I think now could be an opportune time to consider an investment in this fledgling childcare centre operator. Especially with its pipeline of newly developed, purpose built childcare centres around Australia waiting to be acquired progressively over the next five years. I believe this will provide the company with the ability to grow its earnings at an above-average rate for some time to come.

Another reason I like Think Childcare is its growing dividend which I think could make it a dividend star of the future just like this share.

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