Do you have a higher-than-average tolerance for risk? If you do, then it could be worth checking out the two small-cap ASX stocks that Bell Potter rates as buys.
Here's what its analysts are saying about these small-cap stocks:
Catapult Group International Ltd (ASX: CAT)
Bell Potter remains very positive on this sports technology company's shares.
Its analysts are expecting a strong half-year result from the company in November and feel this could be a catalyst to getting its shares heading higher. It said:
We see the upcoming 1HFY24 result as a potential catalyst for the share price given the likely strong top line revenue growth and positive statutory and underlying EBITDA. Strong revenue growth in T&C (i.e. Video) would also likely be well received given this has been the laggard the last couple of years though we still expect growth in P&H (i.e. wearables) to be stronger.
Bell Potter has a buy rating and a $1.35 price target on its shares.
IPD Group Ltd (ASX: IPG)
Bell Potter also says that this leading distributor of electrical equipment and industrial digital technologies could be a small-cap ASX stock to buy.
It believes the company is well-positioned for growth over the long term thanks partly to the electrification growth trend. The broker explains its bullish stance as follows:
We view IPG as a high quality play on the electrification growth trend which is emerging as a dominant market narrative. Our favourable investment thesis is based on three key points: (1) product volumes being driven by refurbishment/ upgrade of existing infrastructure and by virtue of relatively low demand risk; (2) IPD's large turnaround opportunity with a globally leading manufacturer in ABB (market share in Australia of 5-10% compares to Europe of 20-30%); and (3) IPD's electric vehicle charging opportunity reaching a tipping point in FY24e. Australia is set for a $650m public fast charging investment cycle by 2027 and IPD is engaged with a number of players who we expect to lead this transition (e.g. service station chains and network operators).
Bell Potter has a buy rating and a $5.50 price target on IPD's shares.