If you're wanting a little exposure to the small side of the market, then it could be worth checking out the two small-cap ASX shares that Bell Potter rates as a buy.
Here's what the broker is saying about them:
Ai-Media Technologies Ltd (ASX: AIM)
Bell Potter has a buy rating and 55 cent price target on this captioning, transcription, and translation services provider. This price target implies a potential upside of 93% for investors over the next 12 months.
Commenting on its FY 2023 results, the broker said:
AIM has delivered a solid FY23 with revenue +3% to $61.8m (BPe $60.8m) largely underpinned by the scaling of LEXI solutions (Tech revenue +33% to $24.0m) with the continued transition towards higher margin SaaS revenue driving gross margins to 60% from 55% in FY22. EBITDA was broadly in line with our forecast (+201% to $3.3m) demonstrating improved operating leverage however, NPAT of -$4.0m (+18%) was a miss (BPe -$1.9m) driven by an income tax expense vs. our forecast benefit.
One of the reasons the broker is bullish on this small-cap ASX share is its large market opportunity. It adds:
In 2020, the speech-to-text segment of the language services market was forecast to be US$11.8 billion, increasing to US$14.7 billion in 2022. Key industry drivers include: growth in media consumption, higher levels of engagement with captions and increased regulatory requirements for localisation.
Medical Developments International Ltd (ASX: MVP)
Another small-cap ASX share that Bell Potter rates as a buy is this medical device company. Its analysts have a speculative buy rating and a $1.60 price target on its shares. This implies a potential upside of 82% for investors over the next 12 months.
The broker sees a big opportunity for the company to grow its Penthrox offering in the emergency department (ED) segment of the market. It explains:
Rapid onset, non-opioid mechanism and ease of administration provides significant advantage in the overburdened ED environment. Whilst there is currently limited penetration within the ED setting, this growth may be accelerated by the newly appointed sales team and its engagement with clinicians and hospital departments.
