The likes of Challenger Ltd (ASX: CGF) and WiseTech Global Ltd (ASX: WTC) may get the headlines today after their shares roared higher, but there were some equally strong gains being made at the small end of the market.
Three small cap shares that are shining today are listed below. Here’s why they are climbing:
The Baby Bunting Group Ltd (ASX: BBN) share price has pushed 5% higher to $1.41. Although the baby products retailer downgraded its earnings guidance yesterday amid margin pressure caused by the clearance activities of closing competitors, one leading broker has responded positively. According to a note out of Citi, the broker has upgraded Baby Bunting from a sell rating to neutral and lifted the price target on its shares to $1.50. The broker expects the company to gain market share in FY 2019. I think Baby Bunting is a great option for investors that are willing to stick with it through these short term headwinds.
The Fleetwood Corporation Limited (ASX: FWD) share price has bounced back after yesterday’s sizeable decline with a 4% gain to $1.98. On Tuesday the accommodation solutions and recreational vehicle company downgraded its FY 2018 underlying EBIT guidance to $5.5 million from “marginally ahead” of the $14.6 million it achieved in FY 2017. This was caused partly by ongoing losses from its Caravan Manufacturing business. Some investors appear to believe yesterday’s selloff was overdone.
The Zenitas Healthcare Ltd (ASX: ZNT) share price is up 3.5% to $1.07 after the government pledged $1.6 billion over the next four years to support older Australians who want to stay at home instead of going into aged care. As a fast-growing home care and health services company, Zenitas could be positioned perfectly to benefit from this. I think Zenitas is one of the best small cap shares in the healthcare sector right now and the Federal Budget only makes it more attractive.
As well as Zenitas, here are three more exciting small cap shares with strong growth potential.
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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 Challenger Limited. The Motley Fool Australia owns shares of WiseTech Global. The Motley Fool Australia has recommended Zenitas Healthcare Ltd. 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.