Fans of small cap ASX shares will ask you what is the point in only investing in well-known brands?
If you're just holding large-cap household names, then you might as well just put your money into an index fund, they say.
Smaller businesses also present more opportunities when the stock price doesn't fairly reflect the actual future potential, or even current performance.
The fewer people that pay attention to it, the higher the chance the share price will peel off what's expected.
With this in mind, here are a pair of ASX shares you may not have heard of that experts have picked as "buys" right now:
Image source: Getty Images
'Earnings outlook is strong'
In a year when most ASX shares have dipped, the NRW Holdings Limited (ASX: NWH) stock price has risen more than 20%.
"The earnings outlook is strong for this mining services company," Fairmont Equities founder Michael Gable told The Bull.
The company provides contracted services to the mining industry. Think drilling, digging, blasting and equipment maintenance.
NWR is riding the boom that its resources sector clients are currently experiencing.
Despite the recent share price surge, Gable feels like "the valuation remains cheap".
"From a charting perspective, the share price had been consolidating for the past few months before breaking higher after its half-year results," he said.
"We now expect the shares to trend higher from here."
'Strong tailwinds'
XRF Scientific Limited (ASX: XRF) also services the mining industry but with more scientific activities, such as chemical analysis.
According to Medallion Financial Group director Philippe Bui, the company put up "solid results" for the first half.
"Revenue grew by 24% and net profit after tax increased by 17%," he said.
"Also, results indicated continuing momentum into the second half, with record orders."
With the resources sector basking in increasing commodity prices, Bui sees more upward movement for the XRF Scientific share price.
"Increasing capital expenditure is expected in the mining exploration sector, which should provide strong tailwinds for XRF."
The share price more than quadrupled since the March 2020 COVID-19 crash.
Bui's colleague Michael Wayne told The Motley Fool last year that XRF's valuation was still not excessive.
"It's got a strong balance sheet," he said.
"A multiple of 25, 30 times earnings, as well, isn't too challenging for a company that is growing quite nicely."
