Motley Fool Australia

2 very exciting small cap ASX shares to watch

ASX share price on watch represented by surprised man with binoculars
Image source: Getty Images

There are a lot of options at the small end of the market for investors to choose from.

Two that could be worth getting better acquainted with are listed below. Here’s what you need to know about them:

PlaySide Studios Limited (ASX: PLY)

The first small cap to watch is PlaySide Studios. It is one of the largest independent video game developers in the country with a total of 52 titles developed.

Its portfolio includes games based on its own original intellectual property and games developed with Hollywood studios. The latter comprises titles relating to Jumanji, The Walking Dead, Batman, Superman, Teenage Mutant Ninja Turtles, and Disney Pixar’s Cars.

From these titles, the company generated a 55% increase in revenue to $7 million in FY 2020. The good news is that this is still only a fraction of its global market opportunity. The company currently estimates that the mobile games market is worth worth $77.2 billion per annum. 

PlaySide intends to use the proceeds from its recent IPO to support its growth plans. This includes securing the rights to develop mobile games from select media brands, expanding its development team to support new original titles, and opening an office in Hollywood to be closer to studios.

Serko Ltd (ASX: SKO)

Another small cap to watch is Serko. It is the New Zealand-based online travel booking and expense management provider behind the Zeno Travel and Zeno Expense platforms.

Serko’s Zeno Travel product provides AI-powered end-to-end travel itineraries, cost control and travel policy compliance to corporate customers. Whereas Zeno Expense allows its users to automate and streamline the expense administration function, identify out-of-policy expense claims, and prevent fraud.

Unsurprisingly, Serko has been hit hard by the pandemic’s impact on travel markets. However, the company has been experiencing a rebound in demand for its services. In November transaction volumes increased to 44% of prior year volumes. This was up from 35% of prior year volumes for the month of October.

The company also has a major deal with travel giant Booking.com, which is expected to be a key driver of growth once travel markets return to normal again.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Related Articles…

Latest posts by James Mickleboro (see all)