The Motley Fool

3 top small cap shares with enormous potential

During the last 12 months small cap shares have outperformed their large cap peers by a decent margin.

This evident in the performance of the S&P/ASX Small Ordinaries (Index: ^AXSO) (ASX: XSO) which has pushed 17% higher during this time, compared to the 5.5% gain made by the benchmark S&P/ASX 200.

Whilst there is no guarantee that this outperformance will continue over the next 12 months, I remain confident that there is enough quality at the small-end of the market for it to deliver another market-beating 12 months.

Three top small cap shares that I think are worth considering today are listed below. Here’s why I like them:

Helloworld Ltd (ASX: HLO)

I think this travel company is largely underappreciated by the market and a great option for investors. The growing popularity of its integrated service offering led to Helloworld recently posting first-half profit before tax growth of 39.2% to $7.3 million. Pleasingly, management believes the company is well placed to continue the positive momentum into the second half of FY 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. Whilst all these sectors are lucrative opportunities, I am most bullish on its prospects in the aged care sector due to Australia’s ageing population. Yesterday Swift Networks announced its first-half results which revealed a 32% increase in half-year revenue.

Zenitas Healthcare Ltd (ASX: ZNT)

This growing home care and health services company listed on the ASX last year and looks set to be a big winner from the National Healthcare Reform. This Reform aims to push the burden of healthcare services from hospitals into primary care providers such as Zenitas. As a result, I believe it is in a great position to profit over the long term. Especially due to operating in a highly fractured industry which provides it with opportunities to accelerate its growth through acquisitions.

Helloworld, Swift Networks, and Zenitas are not the only shares I would buy today, these three up and comers have equally strong prospects.

The Disruptors: 3 Revolutionary Aussie Companies to Back for 2018

We’re living in one of the most exciting times in investing history. Innovation and a booming culture of entrepreneurship are constantly creating new companies with the potential to make forward-thinking investors very rich. Now more than ever, one small, smart investment could make a huge difference to your wealth.

That’s why at The Motley Fool we’ve been scrutinizing the ASX to uncover the kinds of companies that we believe could turn into the next Cochlear or REA Group.

We’ve found three exciting companies that we believe re poised to perform in the new year. Click here to uncover these ideas!

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Helloworld Limited. The Motley Fool Australia has recommended Zenitas Healthcare 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.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

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 near a 52-week low all while offering a 2.8% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click 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.