The Motley Fool

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.

And here is another top small cap share which has been tipped to have a very big future thanks to its US$22 billion market opportunity.

One ASX Stock For An Estimated $US22 Billion Marijuana Market

A little-known ASX company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

And make no mistake – it is coming. To the tune of an estimated $US22 billion.

Cannabis legalisation is sweeping over North America, and full legalisation arrived in Canada in October 2018.

Here's the best part: we think there's one ASX stock that's uniquely positioned to profit immensely from this explosive new industry... taking savvy investors along for what could be one heck of a ride.

AND, this is the first time The Motley Fool Australia has EVER put a BUY recommendation on a marijuana stock.

Simply click below to learn more on how you can profit from the coming cannabis boom.

Click here to find out more

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.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.