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3 S&P/ASX Small Ordinaries shares to watch

I think that the little followed S&P/ASX Small Ordinaries (Index: ^AXSO) (ASX: XSO) is home to a good number of exciting small-cap companies with enormous growth potential.

Three which I have my eye on at the moment are listed below. Here’s why I think they should be on your watchlist today:

Amaysim Australia Ltd (ASX: AYS)

I think that this growing telco company is well worth taking a closer look at due to its strong core business and its recent expansion into offering home energy plans and low-cost Amaysim-branded NBN plans. I believe these recent ventures could provide the company with significant growth in earnings if it is successful in cross-selling the services to its existing customer base. Another bonus is that its shares provide a partially franked trailing 4.6% dividend.

Collins Foods Ltd (ASX: CKF)

This KFC operator’s shares have been on a bit of a slide in recent months following a weaker-than-expected half-year result which was due largely to some significant one-off charges. But with that behind it now and the company embarking on an expansion into an under-penetrated European market, I think investors ought to take another look at Collins Foods. Its shares offer a trailing fully franked 3.2% dividend at the current share price.

Tassal Group Limited (ASX: TGR)

With its shares trading just a touch above their 52-week low I think this salmon and seafood producer could be worth considering. Tassal has been investing heavily as part of its aim of becoming a world leading seafood company. I believe the company will reap the rewards of these investments in the coming years, allowing it to continue increasing its dividend. At the current share price Tassal’s shares provide a generous trailing fully franked 4% dividend.

Lastly, here are three more exciting shares that I think could be in the buy zone today.

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Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. 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.

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