Small cap stocks are often a good place to find hidden gems that professional and institutional investors have not yet discovered or are unable to invest in given limitations in their investment criteria.
With that in mind, here are three small cap stocks that could help you beat the professionals:
Bravura Solutions Ltd (ASX: BVS) provides superannuation, pension, life insurance, investment, wrap, private wealth and funds administration software and related professional services. The company owns the Sonata wealth management administration system which has been driving growth with long term contracts recently signed with South African listed companies Discovery Limited and Stanlib (part of Liberty Group). The Sonata system has achieved a compounded annual growth rate of 108% since FY 2018 and management are bullish on the outlook.
MotorCycle Holdings Ltd (ASX: MTO) is Australia’s largest motorcycle dealership operator with 34 franchises operated from 24 locations in Queensland, New South Wales and the Australian Capital Territory. It has continued to grow in a challenging market through acquiring new dealerships, a new finance joint venture with Allied Credit and a diversified revenue stream.
FFI Holdings Ltd (ASX: FFI) is a specialised food manufacturing operation, providing ingredients, products and services to Bakers & Pastrycooks, Ice cream & Dairy, Confectionery, Chocolate, Food Service and Supermarkets. The business has very little debt and has benefited from lower raw material costs as the prices of sugar and coco have declined significantly. The company focuses on niche markets and has a preference for bolt on acquisitions. It recently acquired Orchard Icing which management expects to provide significant synergies with the existing operations.
If you are looking for more ideas on companies to invest in, you might want to have a look at these three Aussie companies that are taking over the world.
Our experts here at The Motley Fool Australia have just released a fantastic report, detailing 5 dirt cheap shares that you can buy in 2020.
One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…
Another is a diversified conglomerate trading over 40% off its high, all while offering a fully franked dividend yield over 3%...
Plus 3 more cheap bets that could position you to profit over the next 12 months!
See for yourself now. Simply click here or the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.
You can follow Kevin on Twitter @KevinGandiya.
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.