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3 small cap ASX shares that could be long-term market beaters


Small-cap shares are undoubtedly riskier than their large cap peers, but they also offer the potential for much bigger returns.

You only need to look at the performance and returns generated by the shares of Altium Limited (ASX: ALU) and Webjet Limited (ASX: WEB) over the last decade to get an idea of how rewarding an investment in a successful small cap can be.

With that in mind, here are three small cap shares that I think could have bright futures ahead of them:

Audinate Group Limited (ASX: AD8)

Audinate is a digital audio-visual networking technologies provider which has been growing at an impressive pace over the last couple of years. The key driver of its growth over this time has been its award-winning Dante audio over IP networking solution. Dante is used extensively across the professional live sound, commercial installation, broadcast, public address, and recording industries globally. Due to its industry-leading position and sizeable market opportunity, I believe it still has a significant runway for growth.

ELMO Software Ltd (ASX: ELO)

Another small cap share to consider is ELMO Software. It is a cloud-based human resources and payroll software company which provides a platform which allows its customers to streamline processes for numerous items including employee administration, recruitment, on-boarding, learning, performance, remuneration, compliance training, and payroll. It has been growing at a very strong rate since its IPO thanks to a combination of organic growth and earnings accretive acquisitions.

PointsBet Holdings Ltd (ASX: PBH) 

PointsBet is a corporate bookmaker which offers innovative sports and racing betting products and services direct to clients via its scalable cloud-based technology platform. It recently listed on the Australian share market after raising $75 million through its IPO. The proceeds will be used primarily to fund marketing, customer acquisition, and software and platform development. I think PointsBet has a very lucrative opportunity in the United States market and could have a lot of success with its unique offering.

Where to invest $1,000 right 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.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*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 and recommends Elmo Software. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Elmo Software 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.

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