I think that the local share market hosts a good number of small-cap shares with strong long-term growth potential.
Below you will find five little-known small-cap shares flying under the radar which I’m watching very closely. Although not all of these shares are investable right now, I think all deserve to be added to your watchlist today.
Cynata Therapeutics Ltd (ASX: CYP)
This stem cell and regenerative medicine company’s Cymerus technology is able to produce an unlimited number of high quality stem cells at a low cost. These stem cells can then be used to treat a number of diseases including Graft versus Host Disease (GvHD). FUJIFILM has an exclusive worldwide license to market and sell its therapeutic MSC product CYP-001 for the treatment of GvHD. The Japanese-giant estimates the market of this product in GvHD will be around US$300 million at its peak. Ultimately, the double-digit royalties from these sales will fall straight to Cynata’s bottom line.
LiveHire Ltd (ASX: LVH)
LiveHire is a growing talent technology company that provides a software platform which creates a pool of pre-qualified job candidates to access when companies need to recruit. By doing things this way, it saves recruiters both time and money. In the last few months the company has announced major deals with companies such a Roy Hill, Randstad (Singapore), and Queensland Health. These three join the likes of Wesfarmers Ltd (ASX: WES) and Bupa as users of the software platform.
Rent.com.au Ltd (ASX: RNT)
Australia’s number one website dedicated to rental property has been growing very strongly over the last 12 months. Perhaps the biggest highlight of all has been the rapid adoption of its Renter Resume service. In just ten months the company has exceeded 150,000 users of the service which allows renters to create a resume that can be presented to prospective landlords through its platform. I believe this particular service makes its platform sticky and should result in renters coming back time and time again.
Swift Networks Group Ltd (ASX: SW1)
This fast-growing telecommunications and digital entertainment company is one to watch in my opinion. Thanks to the growing demand for its services from the resources sector, student accommodation facilities, the hospitality sector, and the aged care market, I believe Swift Networks is in a strong position to grow at an above-average rate over the next few years.
Xtek Ltd (ASX: XTE)
I think that this small-cap defence technology company is well worth adding to your watchlist today. After all, Xtek is the primary contractor in the $100 million LAND 129 Phase 4 program for the supply of drones to the Australian army. From July 2018 the company will begin delivering a range of products worth approximately $42 million to the ADF over a three year period. This figure does not include the significant maintenance fees that the company can expect to generate over the period from the contract.
Finally, here's another exciting tech company that could have significant growth potential in the future.
On 9 March, the visionary Tesla co-founder and CEO made a bold $63,000,000 to save a large swath of Australia. But in the process, he accidentally revealed the small Melbourne-based company that allows him to consistently make the impossible possible. At one point, this little understood company was actually the single most heavily shorted share in all of the ASX. Yet oddly enough, nine out of 10 analysts call it a screaming BUY! And that includes Motley Fool Australia.
We just isolated this company as Elon Musk’s “secret weapon”, and think it’s dynamic run (up more than double after initially floating shares just two and a half years ago!) is only getting started. For the full story on this company, as well as how to get invested alongside us today, simply click here!
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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.