At the small end of the share market there are a number of companies which I believe have the potential to grow significantly in the future.
Not all of these shares will ultimately deliver on their potential, but four that I’m watching very closely are listed below:
Food Revolution Group Ltd (ASX: FOD)
This food processing company has products on the shelves of supermarkets including Coles Group Ltd (ASX: COL) and Woolworths Limited (ASX: WOW). In FY 2018 it generated sales of approximately $35 million and is aiming to build on this in FY 2019 through an expansion into the China market and a recently announced supply contract with ALDI Australia for Apple Mango juice.
LiveTiles Ltd (ASX: LVT)
I think that this software company is worth keeping a close eye on. Its digital workplace platform increases collaboration and efficiency among employees and has been growing in popularity this year. So much so, in the first quarter it reported a 272% increase in annualised recurring revenue on the prior corresponding period. Its close ties with Microsoft and the appointment of a dedicated sales force have helped drive this growth.
Megaport Ltd (ASX: MP1)
Megaport is a provider of elastic interconnection services across a growing number of data centres globally. I believe this service has significant potential and expect demand to grow strongly in the future as the cloud computing boom accelerates. In the first quarter of FY 2019 Megaport saw its monthly recurring revenue lift a solid 20% on the previous quarter to $2.4 million. This puts it in a position to build on FY 2018’s strong result.
Serko Ltd (ASX: SKO)
Serko is a travel and expense technology solutions provider worth adding to your watchlist. Its online booking tool provides clients with access to a wide variety of travel providers including low cost carriers. I believe the fact that travel agent giant Flight Centre Travel Group Ltd (ASX: FLT) is a customer is a testament to the quality of its offering. This year management expects revenue growth in the range of 20% to 30%.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Flight Centre Travel Group Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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.