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3 small caps I’m watching this week

Finance news is dominated by the large-cap companies on the ASX, but there are several small-cap stocks charging ahead with operations and making gains that indicate you should keep them on your radar.

These are the 3 small caps I would have on my watchlist this week if you’re looking for more speculative opportunities.


Intellectual property services firm IPH Limited is faring well from increases in demand for its professional services with positive earnings impetus and consistent revenues driven by the long-life IP cycle, with patent granting work usually taking 3-5 years.

This gives IPH the chance to develop strong relationships with its customers, with patent filing figures across both Australia and Asia on the up.

IPH is bolstered by this industry growth driver, which has been reflected in its share price recovery of late, with today’s share price of $4.46 up 37% from a March low of $3.25.

But there could still be plenty of room for growth in share price for IPH as the company romances the growing IP protection market in the Asia region.

A possible buy if you are seeking an experienced player with a unique Asian positioning who seems to be leveraging well off growing market demand for its services.

Austin Engineering Ltd. (ASX: ANG)

Small-cap mining attachment product manufacturer, Austin Engineering Ltd is an emerging company, with a mere $130 million market cap at present.

Austin manufacture, repair, overhaul and supply mining attachment products, general steelwork structures and other associated products and services for the industrial and resource-related sectors.

With the stock currently trading at just 22c per share – up from 20c at this time last year – a buy-in would be a pretty speculative pick and investors might like to keep this one on their watchlist for a while to see if the company can deliver good gains in the medium-term, with management looking fairly prudent in its forecasts.

A niche market space, but one with perhaps some good value as demand increases from bigger mining players.

Hub24 Ltd (ASX: HUB)

Shares in financial services company Hub24 Ltd were up in 52-week high territory back in May, with a May 23 high of $15.08.

Hub24 shares have now dropped back to today’s price of $12.65, down 4% at the time of writing, despite releasing an impressive FY18 update today.

Today’s report signals Hub24 is primed for some impressive gains for FY18, with underlying EBITDA forecasts at $11.8 million – up from $5.1 million in FY17.

Hub24’s funds under administration (FUM) stand at $8.3 billion, with a joint development with Fitzpatricks Private Wealth and its Agility Applications initiative expected to produce a further lift.

Hub24 shares aren’t cheap right now, but it looks pretty unstoppable, much like peer Bravura Solutions Ltd (ASX: BVS) who is playing to the needs of the emerging fintech space nicely also.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended IPH Ltd. The Motley Fool Australia owns shares of Bravura Solutions 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.

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