In my opinion the Australian share market isn't short of small cap shares with strong long-term growth potential.
Three up and coming shares that I think investors should take a closer look at are listed below. Here's why I think they are worthy of a place on your watchlist:
Experience Co Ltd (ASX: EXP)
Experience Co is an adventure tourism company that I believe will benefit from the Australian tourism boom and millennials' preference for experiences over possessions. Now could be an opportune time to invest after a once in a generation inclement weather event impacted the business and led to an earnings downgrade and subsequent selloff of its shares. Although they have rallied in recent weeks, they still trade at a reasonable 17x estimated FY 2019 earnings. I think this is a fair price to pay for a company with the potential to grow at an above-average rate for many years to come, weather permitting.
Nearmap Ltd (ASX: NEA)
Nearmap is a geospatial map technology provider that has been on fire over the last 12 months and seen its share price rise an impressive 75%. A good portion of this rise has come in 2018 thanks to improvements in its United States-based business. Following positive changes to its operations in the country, Nearmap recently advised that U.S. annualised contract value had risen to US$10 million during the March quarter. While this is still only a relatively small number in comparison to its market capitalisation, management appears optimistic that there is a significant market opportunity in the country. Nearmap remains on my watchlist for now, pending its growth in the U.S. market.
Supply Network Limited (ASX: SNL)
Supply Network is an after-market parts supplier to the commercial vehicle industry which has had a strong FY 2018. Earlier this month the company upgraded its full-year earnings guidance on the back of positive trading conditions. Instead of earnings before interest and tax (EBIT) of approximately $10.8 million, management lifted its guidance up to $11.5 million. This will be an increase of around 19% on FY 2017's result, which I think makes its shares good value at 20x estimated full-year earnings.
