Motley Fool Australia

Why these small cap ASX shares could be destined for big things

watch, watch list, observe, keep an eye on
Image source: Getty Images

If you’re a fan of small cap shares, then you’re in luck because I think there are a number on the market at the moment that could have bright futures ahead of them.

Three small caps that I think are worth adding to your watchlist are listed below:

Audinate (ASX: AD8)

Audinate is a leading provider of professional digital audio networking technologies globally. Its key product is the award-winning Dante platform which distributes digital audio signals over computer networks and is designed to bring the benefits of IT networking to the professional AV industry. Demand for Dante from professional live sound, commercial installation, broadcast, public address, and recording industries globally has been growing strongly, leading to impressive sales growth over the last couple of years.

Citadel Group Ltd (ASX: CGL)

Another small cap share to watch is this software and services company. Citadel specialises in secure information management in complex environments. The company is currently transitioning its sales focus towards scalable solutions that provide annuity revenue streams. Whilst this has led to a slowdown in overall sales growth, the company has been growing strongly in the right areas.  For example, in the first half of FY 2019 the company reported a sizeable 39.1% increase in its SaaS revenue to $16.8 million. Given the growing importance of data security and the quality of its Citadel-IX product, I expect this strong growth to continue in the second half and beyond.

Serko Ltd (ASX: SKO)

A final small cap share to look at is Serko. It is the leading online travel booking and expense management provider in the ANZ region, counting the likes of Flight Centre Travel Group Ltd (ASX: FLT) and Telstra Corporation Ltd (ASX: TLS) amongst the 6,000+ corporate customers using its products to help manage their corporate travel programs and make sense of their corporate expenses. Demand has been growing strongly for its offering, leading to management providing full year revenue growth guidance of between 20% and 30%.

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

*Returns as of 6/8/2020

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, Flight Centre Travel Group Limited, and Telstra Limited. The Motley Fool Australia has recommended Citadel Group Ltd and Serko Ltd. 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.

Related Articles...