MENU

3 growing small cap shares with huge potential

One thing that I think we are not short of on the Australian share market is small cap shares with bucket loads of growth potential.

Three up and coming shares that I think investors should be keeping a close eye on are listed below. Here’s why I think they are worthy of a place on your watchlist:

Bubs Australia Ltd (ASX: BUB)

I’m sure all our readers will be very familiar with the infant formula boom that companies such as A2 Milk Company Ltd (ASX: A2M) and Bellamy’s Australia Ltd (ASX: BAL) are experiencing in China. Bubs is aiming to follow in their footsteps with its goats milk offering. Management has been extremely busy signing distribution agreements with supermarkets and pharmacies in Australia and with mother and baby stores and e-commerce platforms in China. This hasn’t yet translated into meaningful sales, though, so I’m keeping my powder dry until I see evidence that Chinese consumers are interested in its product.

Redbubble Ltd (ASX: RBL)

I think that this e-commerce platform provider’s strong performance so far in FY 2018 has been very impressive and deserves more recognition. Earlier this year the company reported revenue of $102.3 million for the first half of FY 2018, a solid increase of 30% on the prior corresponding period. The good news is that management appears confident that there will be more of the same in the second half, which could make it well worth taking a closer look at Redbubble.

Volpara Health Technologies Ltd (ASX: VHT)

I have been very impressed at the rate Volpara has been growing its annual recurring revenues (ARR). Earlier this month it advised that it has surpassed its FY 2018 ARR growth target of 200% several months before the end of the financial year. The company’s ARR currently stands at NZ$3.6 million, up 223% on FY 2017’s result. This has been driven by greater than expected market share gains in the United States. According to its latest release, approximately 3.2% of all women screened in the United States for breast cancer are now contracted to Volpara’s software. Considering the quality of the product, I suspect these market share gains will continue in FY 2019 and beyond.

Like Bubs, Redbubble, and Volpara, I think these three mid cap shares have enormous growth potential.

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 A2 Milk, REDBUBBLE FPO, and VOLPARA FPO NZ. 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.