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These small cap stars have been tipped to shine

Earlier today I looked at a few shares that were given buy ratings by brokers this week.

These shares were of a large cap nature and would be familiar to most investors.

But they weren’t the only buy-rated shares I came across. Amongst the many notes were a few small cap shares that have been tipped to shine by brokers. They are as follows:

Dacian Gold Ltd (ASX: DCN)

According to a note out of the Macquarie Group Ltd (ASX: MQG) equities desk, its analysts have retained their outperform rating and $3.60 price target on this gold miner’s shares following the release of its June quarterly production report. Its analysts appear pleased with Dacian’s production and the ramp up at Mt Morgans. In addition to its production, exploration activities have been very positive at the Cameron Well site. Macquarie’s price target implies potential upside of almost 24%. While I do think that there could be value found in some of the smaller gold miners like Dacian, I’m bearish on the gold price at present so intend to stay away.

Megaport Ltd (ASX: MP1)

Analysts at UBS have retained their buy rating and $5.20 price target on this elasticity connectivity and network services interconnection provider’s shares. Although the broker was a touch disappointed with Megaport’s latest quarterly result, it appears pleased with the expansion of its cloud ecosystem and the addition of 100Gbps of network capacity. Furthermore, it sees Megaport as a big winner from the cloud computing boom. It expects consumers to be using multiple cloud products in the future, leading to strong growth in demand for its services. I would have to agree with UBS and think investors ought to take a closer look at Megaport. Especially as the broker’s price target implies potential upside of 22%.

Volpara Health Technologies Ltd (ASX: VHT)

A note out of Morgans reveals that its analysts have retained their add rating and 93 cents price target on this healthcare technology company’s shares. The broker appears pleased with Volpara Health Technologies’ first-quarter results and the positive momentum it is exhibiting. The broker has its eyes on the price per screen for its breast cancer screening technology. At present the average price per woman in the United States is nearing US$3.00 and the broker expects that further improvements could see its annual recurring revenues grow strongly. Especially given that it is aiming to almost triple its market share in the United States from 3.2% at the end of FY 2018 to 9% by the end of FY 2019. I agree and feel Volpara Health Technologies is a small cap share that has a bright future ahead of it and is worth looking very closely at. Morgans’ price target implies potential upside of 20%.

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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 VOLPARA FPO NZ. 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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