Small cap shares are undoubtedly more risky than their large cap counterparts, but they also offer the potential for much bigger returns.
With that in mind, here are three small cap shares that I think could be destined for big things:
LiveTiles Ltd (ASX: LVT)
LiveTiles is a digital workplace platform provider which allows its users to create dashboards, employee portals, and corporate intranets that can then be enhanced with artificial intelligence and analytics features. Thanks to the growing popularity of its offering, its close ties with Microsoft, and the engagement of a dedicated salesforce, LiveTiles has continued to grow its annualised recurring revenue (ARR) at an explosive rate in FY 2019. In fact, at the end of the third quarter its ARR had more than tripled year to date to $34.5 million. Management isn’t resting on its laurels and is targeting an ARR of $100 million by the end of June 2021.
Serko Ltd (ASX: SKO)
Serko is a leading online travel booking and expense management provider. Thanks to strong demand for its services from some of the largest companies in the ANZ region, last month it posted a 28% increase in its full year total operating revenue to NZ$23.4 million. Just over 88% of this revenue is classed as recurring, which I believe gives the company a strong foundation to build its future growth on. In light of this and the growing demand for its services, it will come as no surprise to learn that management is confident on FY 2020. It has provided total operating revenue growth guidance of between 20% and 40%.
Straker Translations (ASX: STG)
Straker Translations is a translation services platform provider with a difference. It uses a combination of artificial intelligence and human intelligence to provide efficient language translation services at scale. Last month the company released its full year results and revealed a 44% increase in revenue to NZ$24.6 million. A key driver of this growth was increasing demand for its translation services from existing customers. Straker Translations reported an impressive 53.3% increase in repeat revenue during FY 2019, which I believe is a testament to the quality of its service.
Where to invest $1,000 right now
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*Returns as of February 15th 2021
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Altium. The Motley Fool Australia has recommended Serko Ltd, Straker Translations, and Webjet 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.