Every well-balanced portfolio has a few speculative small caps within it, check out these 3 small cap stocks with big plans.
Generation Development Group Ltd (ASX: GDG)
Shares in diversified investment and financial services company Generation Development Group have been on a downward spiral since its Feb 1 high of $1.74, but according to Morgans, things might be on the up for this $135 million market cap company.
Generation’s funds update for the March quarter saw investment bond sales rocket up 84% with a Morgans broker saying its “long term story” looks promising and upgrading the stock to add from hold.
According to Morgans, recent changes to superannuation rules could see low-tax investment options like investment bonds experience “significant structural growth” and the broker believes Generation Development is poised to ramp up performance where it counts to leverage favourable market conditions.
Morgans has raised its share price target on the stock from $1.28 to $1.33 – Generation Development shares finished at $1.08 on April 23, down 1.3%.
As at March 31, 2018 Generation Development announced funds under management (FUM) had risen by 2.8% to $22.7 million since December 31, 2017.
Generation Development was previously known as Austock Group Limited (ASX: ACK), but officially changed its name and ASX code this month.
Select Harvests Limited (ASX: SHV)
Almond producer Select Harvests Limited has found itself on the 52-week high list in the last week with a share price rally to $6.46 on April 20, down slightly at April 23 close to $6.40.
There are huge opportunities at play for ASX food and agriculture stocks who can get the formula right and market their products to overseas markets such as Asia, Europe and the Middle East, and Select Harvests bumper 2018 harvest is something to get excited about.
Its geographically-diverse orchard portfolio is expected to produce record yields this season and it won’t be a one-off for the company, who’s forward planning means 34% of its orchards are yet to mature and acquisitions are underway to expand its portfolio even further.
With Asia in particular getting a taste for nuts and seeds products from reliable Aussie producers, the sky is the limit for Select Harvests, with fellow small cap walnut producer Webster Limited Fully Paid Ord. Shrs (ASX: WBA) hot on its heels.
These small fry have the likes of Nufarm Limited (ASX: NUF), Australian Agricultural Company Ltd (ASX: AAC) and Ruralco Holdings Ltd (ASX: RHL) to aspire to and investors with the stamina for long-term stocks should do their due diligence here.
Smart Parking Ltd (ASX: SPZ)
Parking technology player Smart Parking Ltd shares have been flying of late – up in 52-week high territory at April 23 close with its closing price of 53c per share up 112% from its 25c per share price at this time last year.
Smart parking reported some impressive first-half results in February, with group revenue up 26% to $16.1 million, NPAT up 509% to $2.2 million and adjusted EBITDA up 115% to $3.8 million.
In terms of future growth the company looks like it’s on track to increase margins exponentially with a strategic partnership with Telstra, the roll out of technology in the UK and a strong order book which includes Coles, the City of Adelaide and Moonee Valley City Council.
One thing is for sure, traffic congestion means parking woes are only getting worse, and a company with a strong balance sheet who has strategies to mitigate this probably has a pretty good future on the cards.
These 3 stocks could be the next big movers in 2020
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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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