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3 speculative small caps to watch in 2018

I think at the small end of the Australian share market there are a good number of companies with the potential to become mid to large cap shares in the future.

Three of the more speculative ones that I’m watching are listed below. While I don’t necessarily think they are ready to be bough just yet, here’s why I think they could be worth adding to your watchlist today:

Bioxyne Ltd (ASX: BXN)

This Australian life sciences and health products company is targeting the Asia market with its health and wellness products. One of the key products in its portfolio is its BK18 nutritional health drink which is made with dairy from Waikato, New Zealand and includes an immune boosting probiotic and a range of key vitamins. As we have seen with Blackmores Limited (ASX: BKL), demand for health supplements in this market is extremely strong. Time will tell whether Bioxyne can take advantage of this demand.

Bubs Australia Ltd (ASX: BUB)

Bubs is aiming to follow in the footsteps of A2 Milk Company Ltd (ASX: A2M) by winning a share of China’s massive infant formula market. Last year the company made significant progress in expanding the availability of its goats milk infant formula range. This includes distribution through supermarkets and pharmacies in Australia and numerous Chinese e-commerce platforms. Now it will be a question of whether it can successfully market its products to consumers in a highly competitive market.

Longtable Group Ltd (ASX: LON)

Longtable is a growing food company headed by former Bellamy’s Australia Ltd (ASX: BAL) CEO Laura McBain. Last year Longtable raised $43 million in order to fund the acquisition of leading biodynamic-organic dairy products company B.-d Farm Paris Creek. This complemented its only other asset, a 48% stake in Maggie Beer’s product range. Progress has been a touch slower than I expected, but with McBain’s experience of turning a small cap into a large cap, Longtable is in capable hands.

Finally, here are a few more shares that I'm tipping to have extremely bright futures.

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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 Blackmores Limited. The Motley Fool Australia owns shares of A2 Milk. 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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