If you’re on the lookout for a little exposure to the small side of the market, then you’re in luck.
Right now there are a good number of small cap shares on the Australian share market which I believe have strong long-term growth potential.
Three to add to your watchlist are listed below. Here’s why I like them:
Audinate Group Limited (ASX: AD8)
One small cap share that I would watch carefully is Audinate. It is a digital audio-visual networking technologies provider which has achieved very strong sales growth in recent years. This has been thanks largely to the increasing demand for its Dante product. This award-winning audio over IP networking solution is being used widely across the professional live sound, commercial installation, broadcast, and recording industries globally. The good news is that due to its leadership position and its massive market opportunity, I believe it is capable of continuing its strong top line growth for many years to come.
LiveTiles Ltd (ASX: LVT)
LiveTiles is a digital workplace platform provider. Its software aims to simplify processes and enhance productivity through the creation of internal dashboards, intranet portals, and collaborative online working environments. It has close ties with global tech giant Microsoft and looks well-placed to benefit from cross-selling opportunities. Management estimates that it has a global addressable market worth $13 billion per annum. But in the near term it is aiming to grow its annualised recurring revenues (ARR) organically to $100 million by June 2021. This will be a major lift on its ARR of $42.9 million at the end of September. At this point I have my doubts that it will achieve this. So I feel LiveTiles is one for the watchlist until it has demonstrated that it is on course to hit this target.
People Infrastructure Ltd (ASX: PPE)
People Infrastructure is a workforce management company. Its popular software provides solutions to the management of contractors. It was an impressive performer in FY 2019, posting a 26.8% increase in revenue to $278 million. Pleasingly, thanks to the widening of its margins, People Infrastructure delivered an even stronger operating profit. It reported a 36.8% increase in normalised EBITDA to $17.8 million. The good news is that continued organic growth is anticipated across the business in FY 2020. I feel this positions it well for another strong profit result this year.
As well as those shares, I think investors look for growth options would be crazy for missing out on these hot stocks.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO. The Motley Fool Australia has recommended LIVETILES FPO and People Infrastructure 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.