If you have a penchant for investing in small cap shares, then you might want to look at the two listed below.
Here's why these are highly rated by analysts right now:
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MoneyMe Ltd (ASX: MME)
The first small cap ASX share to watch is MoneyMe. It is a fintech that uses technology and artificial intelligence to deliver highly automated credit products and customer experiences.
MoneyMe notes that it originates loans through a diversified mix of credit products and distribution channels to create significant scale and long-term customer advantages. This will soon include the SocietyOne business, which MoneyMe recently signed an agreement to acquire for $132 million.
In response to the acquisition, Morgans retained its add rating and lifted its price target to $2.57.
Morgans commented: "The acquisition seems a good strategic fit, in our view, with MME adding significant scale to its already rapidly growing business. From FY24, A$17m in pre-tax cost synergies and greater than A$15m in revenue synergies are expected. We have the transaction as cash EPS accretive post synergies and integration costs from FY24 (~6% – ex Revenue synergies)."
"Whilst not without integration risk, the deal should allow MME to continue to deliver strong book growth as it penetrates this additional customer base and utilises new distribution/marketing channels," it added.
Nitro Software Ltd (ASX: NTO)
Another small cap ASX share to look at is Nitro Software. It is a global document productivity software company aiming to drive digital transformation in organisations across multiple industries globally.
Nitro's core solution is the Nitro Productivity Suite. It provides integrated PDF productivity and eSignature tools to customers through a horizontal, software as a service and desktop-based software suite.
Bell Potter is very positive on the company, particularly given its recent "game-changing" acquisition of Connective NV for ~US$81 million.
The broker commented: "The rationale for the acquisition is it will accelerate and enhance Nitro's eSign, eID (electronic identity) and document workflow capabilities. It will also position Nitro to become the third global player in the enterprise eSign market along with DocuSign and Adobe."
Bell Potter currently has a buy rating and $4.50 price target on the company's shares. This compares favourably to the latest Nitro share price of $2.40.
