Due to the potential returns that are on offer at the small end of the share market, I think a little exposure to it can be a good thing for a portfolio if your risk profile allows for it.
Four small cap shares that I think could provide strong returns for investors over the next decade are listed below. Here’s why I like them:
Alcidion Group Ltd (ASX: ALC)
One small cap share to watch closely is Alcidion. It is an informatics solutions company providing software which aims to improve the efficacy and cost of delivering services to patients and reduce hospital-acquired complications. I believe it is well-positioned for growth thanks to the trend for healthcare organisations to shift to a paperless environment.
Bigtincan Holdings Ltd (ASX: BTH)
Another small cap share to consider is Bigtincan. It is a provider of enterprise mobility software which allows sales and service organisations to increase sales win rates, reduce expenditures, and improve customer satisfaction through improved mobile worker productivity. A number of blue chip companies are using its software including Nike and pharmaceutical company Merck.
Serko Ltd (ASX: SKO)
I think that this online travel booking and expense management provider would be worth a closer look as well. Due to the strong demand it is experiencing from new and existing customers, Serko has been growing at an impressive rate over the last couple of years. For example, in FY 2019 it posted a 28% increase in total operating revenue to NZ$23.4 million. Pleasingly, management appears confident of more of the same in FY 2020.
Straker Translations Ltd (ASX: STG)
Straker Translations is a translation services platform provider which I believe has strong long term growth potential in the massive global translation market. It uses a combination of artificial intelligence and human intelligence to provide highly efficient language translation services at scale. In FY 2019 it reported a 44% increase in revenue to NZ$24.6 million. This strong form has continued in FY 2020, with management recently reporting first quarter cash receipts growth of 38%.
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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 Alcidion Group Ltd, BIGTINCAN FPO, and Serko Ltd. The Motley Fool Australia has recommended Alcidion Group Ltd, BIGTINCAN FPO, Serko Ltd, and Straker Translations. 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.