The micro or small-cap end of the share market is full of shares that will regularly move rapidly higher or lower in the space of just a few days as sentiment swings around the businesses and a lack of liquidity adds to the volatility.
It’s also only suitable for experienced investors due to the high risks as many of the companies at this end of the market don’t even have any revenue let alone profits. So you can lose your shirt quickly, but the rewards are huge if you do find tomorrow’s winner.
Let’s take a look at what Commsec classifies as the 10 best performing micro or small-cap shares over the past year.
Source: Commsec, Aug 8, 2019.
Spectrum Metals Limited (ASX: SPX) is up an impressive 980%, but only to 0.81 cents. It’s mainly a gold prospector that is exploring some tenements in WA among other regions.
Advance Nanotek Ltd (ASX: ANO) is up 571% and a ‘small cap darling” thanks to its growing revenues and profits as a manufacturer of an innovative sun screen ingredient. Sales are reportedly climbing among US sunscreen manufacturers.
PPK Group Limited (ASX: PPK) is up 490% to $2.24. It’s a mining services and related asset management business. It made a $1.56 million loss in FY 2018 on revenue of $35.1 million.
Netlinkz Ltd (ASX: NET) is up 441% and reports that it’s a technology provider to secure data networks. It made a $4.7 million operating loss on cash receipts of $188,000 for the year to June 30, 2019.
Iodm Ltd (ASX: IOD) is up 400% and is a digital accounts receivable management platform that took in cash receipts of $427,000 over FY 2019. It reportedly invoiced a record $83,000 in June 2019.
Liontown Resources Limited (ASX: LTR) is up 367% and owns the Kathleen Valley lithium prospect, where it recently reported estimated resources jumped 353%.
Avita Medical Ltd (ASX: AVH) is up 364% to 39 cents. It’s a “regenerative medicine company with a technology platform positioned to address unmet medical needs in burns, chronic wounds, and aesthetics indication.” It grew revenue 50% to $17 million in FY 2019.
Andromeda Metals Ltd (ASX: ADN) is up 353% but only to 0.034 cents. It’s a copper and gold explorer with tenements in SA, WA and Queensland.
iSignthis Ltd (ASX: ISX) is up 342% to 84 cents. According to its website it “delivers remote identity verification and payment authentication coupled with emoney deposit taking, transactional banking and payment processing capability.”
Biotron Limited (ASX: BIT) is working on a drug for the treatment of the HIV virus, which is a claim likely to excite the imagination of the speculative end of the market. The stock is 8 cents today, but got as high as 14 cents back in January 2019.
On any given day there are around 2,300 listed companies on the ASX and there’ll be some huge winners out there somewhere for certain. However, companies that go from micro-cap or penny stock status to the S&P/ ASX200 are extremely rare. Two recent success stories include Afterpay Touch Group Ltd (ASX: APT) and Nearmap Ltd (ASX: NEA), but remember these are rare examples from over 2,000 companies.
5 stocks under $5
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
You can find Tom on Twitter @tommyr345
The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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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