2 excellent small cap ASX shares to watch very closely

Keep your eyes on these excellent small cap ASX shares…

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At the small end of the Australian share market, there are a number of companies with the potential to grow significantly in the future.

Two that investors might want to get better acquainted with are listed below. Here’s what you need to know about them:

Audinate Group Limited (ASX: AD8)

The first small cap share to look at is Audinate. It is the digital audio-visual networking technologies provider behind the hugely popular and industry-leading Dante audio over IP networking solution. Dante is used widely across the professional live sound, commercial installation, and recording industries globally.

The quality of the product is ahead of the competition by such a distance that there are now more than 3,000 different products incorporating Dante for audio-over-IP connectivity. This makes it the protocol of choice in more than 91% of the networked audio products currently available. This bodes well for the company’s future growth in a niche but lucrative market.

At the end of last month, analysts at Morgan Stanley retained their overweight rating and $10.00 price target on the company’s shares.

Serko Ltd (ASX: SKO)

Another small cap to look at is Serko. It is the online travel booking and expense management provider behind the Zeno Travel corporate travel tool and the Zeno Expense platform.

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

Given its exposure to travel markets, demand for its offering has inevitably fallen during the pandemic. However, with travel markets beginning to recover, Serko has also reported big improvements in its performance.

Looking ahead, Serko looks well-positioned to benefit from the travel market recovery and also its significant deal with travel giant Booking.com.

Macquarie is a fan of the company. Last week it retained its outperform rating and lifted its price target to NZ$8.31 (A$7.74). Due to its world class technology, Macquarie believes Serko is well placed as corporate travel continues to recover. It also notes that its growth opportunities are compelling.

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James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AUDINATEGL FPO and Serko Ltd. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO. 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.

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