If you’re interested in gaining a little exposure to the small cap side of the market, the three shares listed below could be worth considering.
I believe they have a lot of potential and could generate strong returns for investors if they fulfil it. They are as follows:
Serko Ltd (ASX: SKO)
Serko is a leading travel and expense technology solution provider. It counts a large number of blue chip companies amongst its customer base and a global travel giant as a partner. That travel giant, Booking.com, even became a cornerstone investor in a recent capital raising. I believe this capital raising and the quality of its offering have put Serko in a strong position to continue growing at an above-average rate for some time to come. This year the company is currently on course to achieve its operating revenue guidance of an increase of 20% to 40%.
Straker Translations Ltd (ASX: STG)
Straker Translations is a translation services platform provider. It uses a combination of artificial intelligence and human intelligence to provide highly efficient language translation services at scale. It recently released its half year update and revealed a 13.3% increase in revenue to NZ$13.6 million. Whilst this is a slowdown on the growth it achieved in FY 2019, this was largely down to its shift away from personal use customers. A stronger second half is expected. Especially after it was selected as one of five preferred vendors for a major global enterprise during the first half. Management expects revenue to rapidly increase from that customer as multiple old vendor agreements end on their side.
Whispir (ASX: WSP)
A final small cap to consider is Whispir. It is a software-as-a-service communications workflow platform provider. It provides an industry-leading software platform that allows companies to deliver actionable two-way interactions at scale using automated multi-channel communication workflows. A number of blue chips are using the platform such as Disney and Foxtel, which I believe is a testament to the quality of the product. Solid demand from new and existing customers led to Whispir reporting Annualised Recurring Revenue of $34.5 million in the first quarter of FY 2020. This was up 10% since the end of June and means Whispir is ahead of its prospectus forecast.
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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 Serko Ltd. The Motley Fool Australia has recommended Serko Ltd, Straker Translations, and Whispir 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.