The Motley Fool

7 small cap shares to watch in FY 2019

There are just a few days left until the arrival of a new financial year.

I think this is as good a time as any to take a look at your portfolio and consider a few additions or exclusions.

One area of the market that I would suggest investors gain exposure to is the small cap space.

After all, the Small Ordinaries index has put on a gain of 19% over the last 12 months, which is over double the 7.6% gain that has been made by the All Ordinaries.

With that in mind, here are seven small cap shares to keep an eye on in FY 2019:

Bubs Australia Ltd (ASX: BUB)

Bubs is a goat milk infant formula company with a lot of promise. The company has signed countless agreements with e-commerce and bricks and mortar retailers that could make it a future star in the industry. The big question is whether there is a demand for its particular product. I think FY 2019 is likely to be make or break for Bubs.

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.

ELMO Software Ltd (ASX: ELO)

ELMO specialises in cloud-based human resources and payroll management software solutions. It is expected to grow EBITDA by 370% to $5.7 million in FY 2018. While growth is likely to moderate in FY 2019, I’m still expecting another strong year.

Money3 Corporation Limited (ASX: MNY)

Money3 is a financial services company that has successfully transitioned away from payday loans to secured auto loans. Its current share of the secured second-hand automotive finance market has grown to 2%. I expect it to continue to win more market share in FY 2019.

MSL Solutions Ltd (ASX: MPW)

MSL Solutions is an Australian based global provider of hosted, software as a service (SaaS) and on-site deployed solutions to clients in the sport, leisure and hospitality sector. Its MPower platform connects member organisations’ business software and data needs to improve guest engagement, loyalty, gain business efficiencies, and improve governance.

Paragon Care Ltd (ASX: PGC)

Paragon Care is a fast-growing provider of integrated services to the health and aged care markets. The company recently announced the acquisition of specialised medical distribution company REM Systems for a net enterprise value of NZ$54.4 million. This acquisition is expected to be highly accretive to earnings in FY 2019.

Supply Network Limited (ASX: SNL)

Supply Network is an after-market parts supplier to the commercial vehicle industry which is on course to have a strong FY 2018. If trading conditions remain favourable I suspect it could repeat its heroics in FY 2019.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

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. The Motley Fool Australia has recommended Paragon Care Limited. 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.

Related Articles...

Latest posts by James Mickleboro (see all)