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10 small-cap shares to watch in 2018

I think it is fair to say that 2017 has been a great year for small-cap shares. During this time the Small Ordinaries (Index: ^AXSO) (ASX: XSO) has outperformed the broader market thanks to its gain of almost 17%.

In fact, some of the gains at the small end of the market have been so strong they’ve turned small-cap shares such as Updater Inc (ASX: UPD) and Appen Ltd (ASX: APX) into mid-cap shares.

Considering the quality on offer in the small-cap space, I expect another year of outperformance in 2018.

Here are 10 small-cap shares well worth keeping a close eye on:

Big Un Ltd (ASX: BIG)

Unlike a lot of promising small-cap shares, the video technology company is already generating significant cash receipts. Thanks to its expansion in the United States and attempts to monetise its video content, I believe FY 2018 could be a huge year for Big Un.

Buddy Platform Ltd (ASX: BUD)

Thanks to reseller agreements with Telstra Corporation Ltd (ASX: TLS), Ingram Micro, and Digicel and a distribution agreement with Dicker Data Ltd (ASX: DDR), this Internet of Things company could be positioned for a big year. Its Buddy Ohm product is often referred to as the “Fitbit for buildings”.

Creso Pharma Ltd (ASX: CPH)

This diversified cannabis company is not just looking at human and companion animal health markets, but also the potentially very lucrative recreational market in Canada. Furthermore, the company recently announced a move into the China market.

Fastbrick Robotics Ltd (ASX: FBR)

I think 2018 could be a big year for the robotics company behind the Hadrian X bricklaying robot. This year the company welcomed US-giant Caterpillar on board as a major shareholder and strategic partner. Caterpillar is aiming to sell Fastbrick Robotics’ technology to its global customer base.

Lepidico Ltd (ASX: LPD)

The lithium boom isn’t likely to go away any time soon due to the insatiable demand for the metal from battery makers and the lack of supply coming to market. This will be good news for this lithium miner. Lepidico owns the technology behind a metallurgical process that has successfully produced lithium carbonate from non-conventional sources.

Mobecom Ltd (ASX: MBM)

Mobecom provides a product portfolio that delivers customer engagement technology solutions. This morning the company announced a major deal with one of South Africa’s biggest companies – Vodacom. Mobecom will develop and commercialise a white-labelled mobile service and migrate Vodacom’s current and historical customer base onto the platform for analytical purposes.

Optiscan Imaging Limited (ASX: OIL)

This medical imaging technology company signed a distribution deal with medtech giant Carl Zeiss this year, putting it in a position to roll out exciting its technology globally once it receives FDA approval. That is expected to occur mid-2018.

Swift Networks Group Ltd (ASX: SW1)

This entertainment and telecommunication services company provides fully integrated solutions for the resources, hospitality, lifestyle village, and aged care accommodation sectors. I believe there is a huge opportunity for the company in the aged care sector due to Australia’s ageing population.

Wattle Health Australia Ltd (ASX: WHA)

Early next year Wattle Health expects to be given CFDA approval to sell its infant formula products in the lucrative China market. If Chinese consumers take a liking to the product then sales could rise significantly.

Yojee Ltd (ASX: YOJ)

This morning this technology company announced that last mile deliveries on its Singapore network have grown 150% over the last month, to achieve an almost 700% increase over the last six months. I think this level of growth makes it one to watch in 2018.

Finally, here are three more exciting shares that could be big winners in 2018.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited and Telstra Limited. The Motley Fool Australia owns shares of Appen Ltd. 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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