When it comes to building an investment portfolio, I think a little exposure to the small cap side of the market can be a good thing.
This is because there are a number of shares in the small cap space which have the potential to generate outsized returns for investors over the next decade. However, as they carry a lot of risk, you wouldn’t want a portfolio full of them.
So, if you have room for one or two small cap shares in your portfolio, then I feel the three listed below would be worth considering:
Bigtincan Holdings Ltd (ASX: BTH)
Bigtincan is a fast-growing provider of enterprise mobility software. This software enables sales and service organisations to increase sales win rates, reduce expenditures, and improve customer satisfaction through improved mobile worker productivity. Earlier this month it announced a three-year deal with sports giant Nike. It joins the likes of U.S. telco giant AT&T, biotechnology company Thermo Fisher, pharmaceutical company Merck, and big four bank Australia and New Zealand Banking Group (ASX: ANZ) as users of the company’s software.
LiveTiles Ltd (ASX: LVT)
LiveTiles is a digital workplace platform provider which is aiming to simplify processes and enhance productivity through the creation of internal dashboards, intranet portals, and collaborative online working environments. Its software leverages artificial intelligence to assist users in quickly completing mundane tasks they encounter on a daily basis through the use of bots. As with Bigtincan, the company has a large number of blue chip clients including Hungry Jacks, Pepsico, and the Victoria State Government.
Serko Ltd (ASX: SKO)
Serko is a leading travel and expense technology solution in the ANZ region which is used by over 6,000 corporate entities and travel management companies. As of the end of FY 2019, its customers had booked more than A$6 billion of travel a year through its platforms. This helped drive recurring product revenue growth of 26% to NZ$20.7 million during the 12 months. And thanks to strong demand from its growing customer base, more of the same is expected in FY 2020.
And here are a few more growth shares that I think could provide strong returns for investors in 2020.
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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 BIGTINCAN FPO and Serko Ltd. The Motley Fool Australia has recommended BIGTINCAN FPO, LIVETILES FPO, and Serko 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.