Buy these small-cap ASX stocks before it's too late: Bell Potter

These small caps could generate big returns for investors according to analysts.

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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.

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 positions in and has recommended Catapult Group International and Ipd Group. The Motley Fool Australia has recommended Catapult Group International and Ipd Group. 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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