Brokers tip huge returns for these exciting small cap ASX shares

Big returns could be on offer for shareholders of these small caps.

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

Two such small-cap ASX shares that brokers are very positive on and rate as buys are listed below. Here's what you need to know about them:

Cosol Ltd (ASX: COS)

COSOL could be a small-cap ASX share to buy according to analysts at Bell Potter.

It specialises in digital IT solutions, with a focus on enterprise asset management software platforms and data management. Its solutions optimise operations in asset-intensive industries, including natural resources, energy and water utilities, defence and public infrastructure.

Bell Potter believes there's a lot to like about COSOL. It explains:

The information presented highlights the compelling value proposition of COSOL in the Enterprise Asset Management (EAM) Industry, with strong financial growth, a diverse client base, strategic partnerships, and actively supports its clients' sustainability goals , COSOL demonstrates its ability to deliver innovative solutions and drive industry-wide transformation. The company's ownership alignment, international expansion, and scalable business model positions it well as a leader in the market. As the EAM software market continues to grow, COSOL's suite of digital technology solutions and forward-thinking approach position it well for future success.

The broker initiated coverage on COSOL earlier this week with a buy rating and a $1 price target. This is 43% higher than where its shares currently trade.

Strandline Resources Ltd (ASX: STA)

Morgans is a fan of this small-cap ASX mining share. The broker feels it offers investors a rare investment proposition that shouldn't be missed. Its analysts explain:

STA is a heavy mineral sands explorer and developer, with projects in Australia and Tanzania. We continue to note that STA is a rare investment proposition. It enjoys: 1) 100% ownership of a world-scale/ strategic asset in a tier 1 jurisdiction; 2) lenient debt terms; 3) visibility on upcoming cashflow/ de-risking; 4) proven, backable management; 5) a reputable board; and 6) clear M&A appeal while trading at a material discount.

Morgans has a 70 cents price target on the company's shares. This is more than double where its shares currently trade.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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