Although the small side of the market is higher up the risk scale and unsuitable for some investors, I believe it is well worth getting a little exposure to it if your risk profile allows.
Especially considering the Small Ordinaries has outperformed the S&P/ASX 200 by a wide margin over the last 12 months.
Three top small cap shares that I think are worth a closer look are listed below:
Noni B Limited (ASX: NBL)
This fashion retailer's shares have been on a tear over the last 12 months but still look to be great value. In fact, if the company's acquisition of a number of brands from Specialty Fashion Group Ltd (ASX: SFH) proves to be a success then its shares could be prove to be cheap at this level. Although these brands have been underperforming for Speciality Fashion, Noni B has a strong track record of turning around failing retail brands and making them profitable. I expect it to accomplish this with these brands, setting it up for strong earnings growth for the next couple of years at least.
Paragon Care Ltd (ASX: PGC)
This provider of integrated services to the health and aged care markets is one of my favourite small cap shares in the healthcare sector. Management has been on a shopping spree this year and made no less than 10 acquisitions which are expected to be significantly accretive to earnings. One of those acquisitions was New Zealand-based REM Systems which it picked up for NZ$54.4 million. If management can integrate these businesses successfully then I expect Paragon Care to be positioned perfectly to deliver above-average growth for the foreseeable future.
Volpara Health Technologies Ltd (ASX: VHT)
This healthcare technology company has been a strong performer over the last 12 months thanks to the growing popularity of its breast imaging analytics and analysis software. The regulatory cleared and patent protected software is rapidly disrupting the U.S. healthcare market and now commands a market share of 3.7%. Management is confident that it will grow its share of the market to 9% by the end of FY 2019, which should lead to another strong rise in its annual recurring revenues. In FY 2018 Volpara finished the year with annual recurring revenues of $3.6 million, up an impressive 223% on the prior corresponding period.
