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These small cap shares have started the week on a high

The market may be sinking lower today, but not all shares have started in the red.

Three small cap shares that have stood out with strong gains today are listed below. Here’s why they are on the rise:

The AuMake International Ltd (ASX: AU8) share price has climbed 4% to 26 cents. This morning the daigou company announced the execution of a binding term sheet to acquire the relevant leases, staff, trademark, member databases, and all associated property associated with the operation of Kiwi Buy. The company will pay $300,000 in ordinary AuMake shares at an issue price of $0.25. It will also reimburse up to $500,000 of inventory subject to stock-take. This seems like a bit of a bargain buy considering preliminary financial due diligence indicates sales of $18 million over the last 12 months through Kiwi Buy’s five store retail network in Sydney. All stores are profitable post labour and occupancy expenses.

The De Grey Mining Limited (ASX: DEG) share price has jumped almost 8.5% to 19.5 cents after the gold explorer provided an update on its drilling at the Mt Berghaus operation. According to the release, shallow drilling no deeper than 60 metres has uncovered high-grade gold zones, many which include “bonanza” high grade rates. Management believes that these results augur well for the next resource estimate update. While I’m not a fan of gold miners at present due to rising rates, any investors looking for an up and coming gold miner might want to take a closer look at De Grey Mining.

The iSelect Ltd (ASX: ISU) share price has zoomed 10% higher to 60.5 cents despite there being no news out of the product comparison company. But with its shares down over 72% since this time last year, I suspect some bargain hunters are swooping in today. Which would not be surprising because prior to today its shares were trading below the price target placed on its shares by Credit Suisse earlier this month. The broker reduced its target price to 58 cents from $1.95 after iSelect downgraded its earnings to such a degree the broker labelled it a contender for downgrade of the year. While its shares do look cheap, I would hold off an investment until there are signs of improvement in its performance.

The Disruptors: 3 Small Cap Companies to Back in 2018

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Motley Fool contributor James Mickleboro 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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