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3 emerging small caps for your watch list

The S&P/ASX 200 gains list has been dominated by big name stocks such as BHP Billiton Limited (ASX: BHP) and Woodside Petroleum Limited (ASX: WPL).

But waiting in the wings are these emerging small cap stocks, and they should be on your radar.

Praemium Ltd (ASX: PPS)

An emerging fintech company in the financial planning technology space, Praemium Ltd shares have tanked today – down 6.7% to 76c after spending the best part of July falling.

Sector peers HUB24 Ltd (ASX: HUB) and Netwealth Group Ltd (ASX: NWL) are also feeling the pinch lately, with both of their share prices dropping back in the last fortnight.

But does this mean it’s buy time in the sector?

My thoughts are, below.

There are plenty of investors trying to time their purchase of fintech shares as best they can, and we may not see sharp drops like these again anytime soon.

Praemium’s funds under management (FUM) surged to $8.3 billion earlier this month with gross inflows 50% higher than last year’s and a client win with Morgan Stanley providing good momentum.

Carnarvon Petroleum Limited (ASX: CVN)

Investors clambered to jump on the Carnarvon Petroleum Limited bandwagon earlier in July after the emerging oil and gas explorer made a significant oil discovery off the coast of Western Australia.

Carnarvon shares have rocketed up 600% from this time last year to sit at 49c per share at the time of writing, with its find giving peers like Woodside Petroleum Limited (ASX: WPL) a boost, with Woodside saying its explorers were “enthused” by the Bedout Basin find – Woodside has acreage in the same area.

But is it too late to buy in?

Where will Carnarvon’s share price go from here?

It’s hard to say how much longer Carnarvon will rise off the back of such positive news, but investors seem to be buoyed by drilling updates at present and, for now, its price looks fairly steady.

I would be inclined to wait for the good news to wear off a little before buying in and take some cues from the bigger end of town in the sector.

Oil Search Limited (ASX: OSH), Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) have all seen some declines of late and Carnarvon has much less in the kitty to buffer itself from sector volatility.

A wait and see option.


Shares in Australian oil and gas explorer Far Ltd have climbed another 4% in early morning trade, sitting at 13c per share at the time of writing.

Far shares have seen a steady incline in the last 12 months and its second quarter report, released yesterday, updated investors on its Gambia and Senegal projects, with the company meeting deliverables and making progress.

Far seems to have its fundamentals well sorted, and Credit Suisse agrees, labelling it as a favourite pick in the oil and gas sector back in May.

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 Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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