This year small-cap shares have once again outperformed their illustrious large-cap rivals based on the performance of the S&P/ASX Small Ordinaries (Index: ^AXSO) (ASX: XSO).
The small-cap index is up almost 12% year-to-date, compared to a gain of just over 5% for the benchmark S&P/ASX 200.
While there is no guarantee that small-caps will do the same in 2018, I think if you choose wisely you have a good chance of outperforming the market.
Three small-caps to consider in 2018 are as follows:
Capilano Honey Ltd (ASX: CZZ)
This leading honey producer held its annual general meeting last week. Within its presentation the company revealed that year-to-date business has been solid and trading is ahead of the prior corresponding period. I believe new product launches and increasing exports to China will put Capilano in a position to deliver a solid full-year result. At an undemanding 15x trailing earnings, I think it could be a good option in 2018.
LiveHire Ltd (ASX: LVH)
This talent technology company provides a popular software platform which creates a pool of pre-qualified job candidates that companies can access when they need to recruit. Unsurprisingly, the platform has been growing in popularity as it saves companies both time and money during the recruitment process. Management believes the total addressable market is worth $20 billion globally.
Noni B Limited (ASX: NBL)
Noni B and its collection of retail clothing brands serves the mature women’s fashion market. Through its popular brands the company has carved out a leading position in this niche market, which is something which I find especially attractive in a retailer. Management recently revealed that it has had a strong start to FY 2018 and looks likely to build on FY 2017’s impressive result. At under 17x trailing earnings I think Noni B is worth considering.
5 stocks under $5
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*Extreme Opportunities returns as of June 5th 2020
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Capilano Honey 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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