These 3 small cap ASX shares are surging higher today

In afternoon trade the local market is on course to finish the week on a positive note. At the time of writing the benchmark ASX 200 is up 0.3%.

Three shares at the small end of the market outperforming today are listed below. Here’s why they have surged higher:

The Botanix Pharmaceuticals Ltd (ASX: BOT) share price is up over 5% to 8.1 cents after the cannabis-focused dermatology company advised that it has received a $4.6 million research and development tax incentive refund. In addition to this, investors may be reacting positively to a broker note out of Bell Potter yesterday. According to the note, the broker has initiated coverage on Botanix with a speculative buy rating and 15 cents price target. The broker believes that the company’s chronic acne and atopic dermatitis treatments could be attractive “for potential partners due to the very large market size and chronic nature of both indications.”

The DigitalX Ltd (ASX: DCC) share price has returned to trade and climbed 10% to 6.6 cents. At one stage the blockchain company’s shares were up as much as 26.5% following the release of an announcement this morning. According to the release, the company has entered into a joint venture with US blockchain investment bank AmerX to enter the Security Token Offerings market. The release explains that the new entity, DX Americas, is being incorporated “to engage in the provision of advisory services, including for tokenomics, smart contract development, marketing, public relations and issuer readiness to companies in the technology and blockchain industries.” I’d suggest investors refrain from investing on this development and wait to see if it is more than a fad.

The Netcomm Wireless Ltd (ASX: NTC) share price has climbed 4% to 75 cents despite there being no news out of the broadband equipment company. I suspect that investors were pleased to see that its performance has not deteriorated since its last update when it warned of flat underlying EBITDA in FY 2019. This flat performance is the result of a lower gross margin which reflects a change in sales mix and higher component costs. Management reaffirmed this guidance at its AGM this week.

Missed these gains? Then don't miss these fast-growing tech shares that have been tipped for big things.

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 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.