The Motley Fool

3 small cap shares that could be destined for big things

Although small cap shares carry a lot of risks, I think if your risk profile allows it, they can be a great addition to a balanced portfolio.

After all, you only need to look at the performance of the Small Ordinaries (Index: ^AXSO) (ASX: XSO) over the last three years to see this.

During this time the Small Ordinaries has gained 23%, compared to a 12% gain by the All Ordinaries.

With that in mind, here are three small cap shares I think could be worth looking closer at:

Audinate Group Limited (ASX: AD8)

Audinate is a digital audio company that develops hardware and software solutions for the professional audio-visual industry. The company was a strong performer in FY 2018, growing full year revenue by 30% to $19.7 million. Pleasingly, this strong form has continued in FY 2019 with a record first quarter result. Last week management advised of first quarter cash collections of $6.8 million, up 51% on the prior corresponding period. This was driven by solid core chips, cards and modules sales, along with strong demand for AVIO adapters.

Paragon Care Ltd (ASX: PGC)

Another small cap share worth considering is this integrated services provider to the healthcare and aged care markets. As well as operating in two markets that are expected to grow strongly over the coming years, Paragon Care has opportunities to accelerate its growth through acquisitions after a recent $45.2 million placement. This should put it in a position to continue growing its dividend, which currently provides a trailing fully franked 4.5% yield.

Serko Ltd (ASX: SKO)

This New Zealand-based travel and expense technology solutions provider is a recent listing on the Australian share market. I’ve been impressed with what I’ve seen since its listing and believe it could be worth a look. Serko’s services are used by a growing number of companies in the travel industry including travel agent giant Flight Centre Travel Group (ASX: FLT). This year the company is expecting to deliver revenue growth of up to 30%.

And finally, here are a few more small to mid cap sized shares that could be destined for big things. Do you own them?

The Disruptors: 3 Revolutionary Aussie Companies to Back for 2018

We’re living in one of the most exciting times in investing history. Innovation and a booming culture of entrepreneurship are constantly creating new companies with the potential to make forward-thinking investors very rich. Now more than ever, one small, smart investment could make a huge difference to your wealth.

That’s why at The Motley Fool we’ve been scrutinizing the ASX to uncover the kinds of companies that we believe could turn into the next Atlassian.

We’ve found three exciting companies that we believe re poised to perform in the new year. Click here to uncover these ideas!

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO and Flight Centre Travel Group Limited. 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.

One ASX Stock For An Estimated $US22 Billion Marijuana Market

A little-known ASX company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

And make no mistake – it is coming. To the tune of an estimated $US22 billion.

Cannabis legalisation is sweeping over North America, and full legalisation arrived in Canada in October 2018.

Here’s the best part: we think there’s one ASX stock that’s uniquely positioned to profit immensely from this explosive new industry… taking savvy investors along for what could be one heck of a ride.

AND, this is the first time The Motley Fool Australia has EVER put a BUY recommendation on a marijuana stock.

Simply click below to learn more on how you can profit from the coming cannabis boom.

Click here to find out more