3 top small cap shares I would buy in March

While small cap shares are higher up on the risk scale than large cap shares, I think investors should consider adding a little exposure to them in order to give their portfolio a better chance of outperforming the market.

After all, the Small Ordinaries (Index: ^AXSO) (ASX: XSO) has gained almost 18% since this time last year compared to a 5.5% gain by the benchmark S&P/ASX 200.

Three quality small cap shares that I think investors should consider buying in March are listed below. Here’s why I’m bullish on them:

Helloworld Ltd (ASX: HLO)

The travel industry was easily one of the star performers during earnings season in my opinion. And one of the highlights from the industry for me was the performance of Helloworld, thanks to the growing demand for its integrated service offering. This demand led to the company reporting a half-year profit before tax of $26 million, up 39.2% on the prior corresponding period. Pleasingly, management appears to expect more of the same in the second-half.

Money3 Corporation Limited (ASX: MNY)

This financial services company recently reported an impressive 18% increase in its gross loan book to $292.8 million thanks to another strong performance from its secured auto loans business. This ultimately helped the company deliver a 12.3% increase in half-year net profit after tax to $15.5 million and allowed it to lift its interim dividend 80% on the prior corresponding period to 4.5 cents per share. I think there is plenty more growth in Money3’s tank, especially when you consider that its share of the second hand automotive finance market is just 2%.

National Veterinary Care Ltd (ASX: NVL)

Although this veterinary company’s shares tumbled lower following the release of its half-year results, don’t let that fool you into thinking they were weak. In the first-half of FY 2018 National Veterinary Care delivered a 27.6% increase in revenue to $41.6 million and a 27.7% lift in net profit after tax to $3.3 million. Whilst the majority of this was driven by acquisitions, the company still posted organic sales growth of 3.1% for the period.

Lastly, here are three mid cap shares with enormous growth potential that could make them great buy and hold investments.

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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 Helloworld Limited and NATVETCARE FPO. The Motley Fool Australia has recommended Money3 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 Scott Phillips.

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