The S&P/ASX 200 Index (ASX: XJO) is very volatile at the moment. But I think that can provide the best opportunities to buy shares at cheaper prices.
There is no doubt that the coronavirus is going to cause a lot of economic pain. The human and healthcare side of this is much worse.
Some shares like CSL Limited (ASX: CSL) have almost entirely recovered their lost ground.
Due to the fact that small caps are usually punished harder than large caps, I think these top shares could be worth buying today:
Pushpay Holdings Ltd (ASX: PPH)
The electronic donation business is one of the few businesses to actually upgrade its guidance during this period. How was it able to do that?
Its model is very useful for this scenario. Churches still need donations during this period, but they can't accept physical cash if everyone is social distancing properly. Electronic donations are great for this.
Pushpay also offers a community app which allows church services to be video streamed to congregations who are staying at home.
The company had already reached profitability before this and the sad events may accelerate Pushpay's growth. I think it could be one of the best small caps over the next three years.
Bubs Australia Ltd (ASX: BUB)
Bubs is one of the ASX's newer infant formula businesses, but it offers a difference – it has goat milk products. I think Bubs has a very promising future after recently investing in all parts of its supply chain, including securing the goats themselves.
The company recently said it had generated a positive operating cashflow of $2.3 million in the third quarter of FY20 with quarterly revenue up 67% compared to the prior corresponding period. Revenue grew by 36% compared to the last quarter.
It's an essential service which is continuing to see strong demand. Infant formula saw revenue growth of 137% and Chinese revenue more than doubled.
With $36.4 million of cash the company is well placed to ride through this period and try to achieve growth for certain products where appropriate.
I am particularly hopeful for Bubs' cow-based organic grass-fed formula range which could attract consumers looking for quality products.
Foolish takeaway
I think both of these ASX small caps have very promising futures and are actually seeing higher level of demand at the moment, adding to their positive futures. Yet both of their share prices are materially down from February. I'd be happy to buy shares of both today.
