Investing in the small side of the share market carries more risk than other areas. However, if your risk tolerance allows for it, having a bit of exposure to this side of the market could be a good thing for a balanced portfolio given the potential returns on offer.
With that in mind, here are three small cap ASX shares that analysts rate highly:
Ai-Media Technologies Ltd (ASX: AIM)
The first small cap ASX share to watch is Ai-Media Technologies. This global media access provider's cloud-based technology platform offers live and recorded captioning, transcription, subtitles, translation and speech analytics. And these services are certainly in demand! So much so, globally, Ai-Media technology delivers 7 million minutes of live and recorded media content, and online events and web streams every month. Bell Potter is positive on the company. It currently has a buy rating and $1.50 price target Ai-Media Technologies' shares.
Mydeal.Com Au Ltd (ASX: MYD)
Another small cap to watch is MyDeal. It is an online retail marketplace focused on home and lifestyle goods. At the end of FY 2021, MyDeal had more than 1,800 sellers on its platform with over 6 million product SKUs listed across over 2,000 categories. And with its customer numbers nearing 1 million, the company looks well-placed to benefit from the shift to online shopping over the long term. The team at Morgans is positive on the company's outlook and has an add rating and 90 cents price target on its shares. It feels MyDeal would be a good option for investors that want exposure to a high growth ecommerce opportunity with a strong balance sheet.
SILK Laser Australia Limited (ASX: SLA)
A final small cap ASX share to watch closely is SILK Laser. It is one of Australia's largest specialist clinic networks, offering a range of nonsurgical aesthetic products and services. SILK's five core offerings comprise laser hair removal, cosmetic injectables, skin treatments, body contouring and skincare products. Demand has remained strong for its services during the pandemic, underpinning stellar sales and profit growth. The good news is that management still sees significant room to expand its clinic over the next decade. This gives it a long runway for growth. Wilsons is bullish on SILK and has an overweight rating and $5.25 price target.
