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5 exciting small cap shares I have on my watchlist

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I believe there are a good number of shares at the small end of the market with strong long-term growth potential.

While not all these shares will ultimately live up to their potential, five which I think are worth a closer look are listed below. Here’s why they are on my watchlist:

Audinate Group Limited (ASX: AD8)

Audinate is a digital audio company that develops hardware and software solutions for the professional audio-visual industry. Strong demand for its key Dante media networking technology from manufacturers and professionals in the audio-visual industry led to Audinate posting a 30% increase in revenue to $19.7 million in FY 2018. More of the same is expected in FY 2019.

Food Revolution Group Ltd (ASX: FOD)

Food Revolution is a food processing company behind the Juice Lab, Thirsty Brothers, and Bucha Shop Kombucha brands. Its products can be found on the shelves of supermarkets including Wesfarmers Ltd (ASX: WES) operated Coles and Woolworths Limited (ASX: WOW). In FY 2018 it generated sales of approximately $35 million and is looking to build on this in FY 2019 through an expansion into the China market.

Megaport Ltd (ASX: MP1)

Megaport is a leading provider of elastic interconnection services in data centres across the world. Due to its exposure to the explosive cloud computing market, I believe it is well-positioned to grow at a strong rate over the long-term. In FY 2018 Megaport saw its revenue increase 85% on the prior corresponding period.

Serko Ltd (ASX: SKO)

Serko is a travel and expense technology solutions company offering an increasingly popular online booking tool which provides clients with access to a wide variety of travel providers including low cost carriers. Management expects to build on its strong FY 2018 performance with revenue growth in the range of 20% to 30% this year.

Telix Pharmaceuticals Ltd (ASX: TLX)

Telix is a biopharmaceutical company focused on the development of diagnostic and therapeutic products based on targeted radiopharmaceuticals. This year the company has signed several manufacturing and distribution partnerships, which means that its first revenues from the Illumet prostate imaging cold kit are expected in the current quarter. These revenues could be bolstered in the future if the numerous promising trials it has underway are a success.

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Motley Fool contributor James Mickleboro owns shares of TELIXPHARM DEF SET. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO and Wesfarmers 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.

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