I think the ASX is home to a good number of small cap shares that have the potential to grow notably larger in the future.
While history shows that not all small caps will ultimately deliver on their potential, I think many of these shares have what it takes to do so.
With that in mind, here are 10 small cap shares to add to your watchlist in 2020:
Alcidion Group Ltd (ASX: ALC)
Alcidion is a health technology company which provides intelligent informatics solutions for healthcare and clinicians as a decision support tools. It software aims to improve the efficacy and cost of delivering services to patients and reduce hospital-acquired complications. I believe it is well-positioned for strong long term growth due to the healthcare sector’s shift to a paperless environment.
Audinate Group Limited (ASX: AD8)
Audinate is a digital audio-visual networking technologies provider. It has achieved very strong sales growth in recent years thanks 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.
Bigtincan Holdings Ltd (ASX: BTH)
Bigtincan is a provider of enterprise mobility software to a number of blue chip companies such as Nike and Sephora. Its software allows sales and service organisations to increase their sales win rates, reduce expenditures, and improve customer satisfaction through improved mobile worker productivity.
Dubber Corp Ltd (ASX: DUB)
Dubber is a software company which develops cloud-based technologies so that businesses and corporate clients can record, manage and analyse their phone calls and communications. It was an impressive performer in FY 2019, growing its revenues by 132% to $7.4 million. I expect another strong result in FY 2020.
ELMO Software Ltd (ASX: ELO)
I think this cloud-based human resources and payroll software company could be worth watching in FY 2020. It provides a unified platform to streamline processes for employee administration, recruitment, on-boarding, learning, performance, remuneration, compliance training and payroll.
LiveTiles Ltd (ASX: LVT)
LiveTiles is a digital workplace platform provider which has close ties with tech behemoth Microsoft. Its software aims to simplify processes and enhance productivity through the creation of internal dashboards, intranet portals, and collaborative online working environments.
Opthea Ltd (ASX: OPT)
Opthea is a developer of novel biologic therapies for the treatment of eye diseases. I think it is worth watching very closely due to the enormous potential of its OPT-302 combination therapy. Earlier this year its Phase 2b study delivered exceptional results. This is a big positive as the current standard of care treatments for wet age-related macular degeneration and diabetic macular edema had sales of over US$3.7 billion and US$6.2 billion, respectively, in 2018.
Serko Ltd (ASX: SKO)
Serko is an online travel booking and expense management provider. It has been a strong performer over the last couple of years and has continued this strong form in FY 2020. It also recently raised NZ$45 million to accelerate its growth. A cornerstone investor in this capital raising was travel booking giant Booking.com.
Straker Translations Ltd (ASX: STG)
Another small cap share to watch in 2020 is Straker Translations. It is a translation services platform provider which uses a mixture of crowd sourcing and artificial intelligence to provide highly efficient language translation services at scale.
Volpara Health Technologies Ltd (ASX: VHT)
Volpara is a provider of software that uses artificial intelligence imaging algorithms to assist with the early detection of breast and lung cancer. Its software continues to grow in popularity with radiologists across North America, leading to strong recurring revenue growth.
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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 and recommends Elmo Software. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Alcidion Group Ltd, BIGTINCAN FPO, Serko Ltd, and VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO. The Motley Fool Australia has recommended Alcidion Group Ltd, BIGTINCAN FPO, Elmo Software, LIVETILES FPO, Serko Ltd, Straker Translations, and VOLPARA FPO NZ. 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.
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