4 exciting small cap shares on my watchlist

Bubs Australia Ltd (ASX:BUB) is one of four small cap shares with significant long-term growth potential…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares such as Altium Limited (ASX: ALU) and Nextdc Ltd (ASX: NXT) weren't always billion-dollar companies.

In fact, around seven years ago both these companies would have been classed as small cap shares with market capitalisations of approximately $20 million and $195 million, respectively.

With their market capitalisations now around $2.5 billion and $2 billion, respectively, long-term shareholders have certainly been rewarded handsomely for sticking with them.

While not all small cap shares will go on to have a blue chip future, I do think there are a number on the market at the moment with significant potential.

They may not be ready to be invested in, but I certainly think they are worth of adding to your watch list. They are as follows:

Animoca Brands Corporation Ltd (ASX: AB1)

This developer and marketer of mobile games and apps for smartphones and tablets globally recently announced the launch of its Tokyo Casino Project game in the App Store and Google Play store. In many respects this game is an attempt to tap into the lucrative market that Aristocrat Leisure Limited (ASX: ALL) is profiting greatly in.

Bubs Australia Ltd (ASX: BUB)

Bubs is a promising goats milk infant formula and baby food company aiming to be the next A2 Milk Company Ltd (ASX: A2M). Investors certainly are excited about its growth prospects judging by its market capitalisation. Bubs is valued at approximately $250 million at present despite generating little by way of sales. It could live up to these lofty expectations, though, if it can win a decent share of the lucrative Chinese infant formula market.

ELMO Software Ltd (ASX: ELO)

Since listing on the ASX this cloud-based talent management software solutions provider has smashed expectations and its prospectus forecasts. This allowed ELMO to recently raise $45 million from institutional investors to accelerate its growth. I believe the strong demand it is experiencing and the large addressable market make it worth considering today.

Livetiles Ltd (ASX: LVT)

LiveTiles is a fast-growing digital workplace platform provider with its eyes on the massive artificial intelligence market. The company recently made big strides forward through the signing of AI-related deals with tech giant Microsoft and the Clean Energy Smart Manufacturing Innovation Institute.

Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia owns shares of and has recommended ELMOSFTWRE FPO. The Motley Fool Australia owns shares of A2 Milk and Altium. 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.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »