Whilst small cap shares are certainly a riskier investment in comparison to their large cap peers, they also offer potentially greater returns.
So, if your risk tolerance allows the addition of one or two small caps to your balanced portfolio, I think the three shares listed below could be worth considering.
Here's why I think they have bright futures:
Audinate Group Limited (ASX: AD8)
Audinate is a digital audio-visual networking technologies provider which has been an impressive performer over the last couple of years thanks to the success of 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, sizeable market opportunity, and new product launches, I believe it still has a significant runway for growth.
Serko Ltd (ASX: SKO)
I think this fast-growing online travel booking and expense management provider could be worth considering with a long-term view. In FY 2019 the company once again experienced strong demand for its services from some of the largest companies in the ANZ region. This led to Serko posting a 28% increase in its full year total operating revenue to NZ$23.4 million. One big positive was that just over 88% of this revenue is classed as recurring, I believe this gives it a strong foundation to build its future growth on. In FY 2020 management has given total operating revenue growth guidance of between 20% and 40%.
Straker Translations Ltd (ASX: STG)
Straker Translations is a translation services platform provider that uses a combination of artificial intelligence and human intelligence to provide highly efficient language translation services at scale. It also experienced strong demand for its services in FY 2019 from new and existing customers, leading to Straker reporting an impressive 44% increase in revenue to NZ$24.6 million. I believe that more of the same is coming over the next few years, especially considering its global market opportunity is expected to be worth US$66 billion per annum by 2022.
