One of the things I love about the Australian share market is the large number of high quality small-cap shares to invest in.
But with so many to choose from, it can be difficult to decide which of them to invest your hard-earned money into.
In an attempt to narrow things down, I have picked out four small-cap shares which I think could be worth a closer look. Here they are:
Citadel Group Ltd (ASX: CGL)
Citadel is a software company specialising in secure enterprise information management. It provides education and technology services to help individuals and businesses maximise value, innovation, and business outcomes in an information-driven world. In the first-half of FY 2018 demand for its services was strong, leading to half-year net profit after tax growth of 22.8% to $6.6 million.
ELMO Software Ltd (ASX: ELO)
ELMO specialises in cloud-based human resources and payroll management software solutions. Like Citadel, demand for ELMO’s software has been growing at a very quick rate. Thanks to this rising demand and earnings accretive acquisitions, ELMO’s management expects the company to grow EBITDA by 370% to $5.7 million in FY 2018.
Experience Co Ltd (ASX: EXP)
Experience Co is an adventure company which offers thrill-seekers activities such as skydiving, canyoning, hot air ballooning, and helicopter ride. It has had a tough FY 2018 due to a once in a generation weather event which forced the closure of many of its operations for a sustained amount of time. Weather permitting, I expect the company to bounce back strongly in FY 2019, which could make it worth seizing on its recent share price weakness.
Supply Network Limited (ASX: SNL)
Supply Network is an after-market parts supplier to the commercial vehicle industry which has been kicking goals this year. Thanks to positive trading conditions that the company is experiencing, last month management upgraded its earnings guidance for FY 2018. Instead of prior guidance of EBIT of $10.8 million, management lifted its guidance up to $11.5 million. This will be an increase of around 19% on last year’s result.
Where to invest $1,000 right now
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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 ELMOSFTWRE FPO and Supply Network Limited. The Motley Fool Australia owns shares of Citadel Group Ltd and EXPERNCECO FPO. 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.