Broker says these exciting small-cap ASX shares are buys

These could be top options at the small side of the market.

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Investors with a high tolerance for risk might want to check out the small-cap ASX shares listed below.

That's because they have just been tipped as buys by analysts at Bell Potter. Here's what it is saying about them:

4DMedical Ltd (ASX: 4DX)

This medical technology company could be a buy according to Bell Potter.

It appears excited by the company's LVAS technology, which may have created a step change in the capacity to accurately and quickly understand the lung function of patients with respiratory diseases.

The broker was particularly pleased with its potential agreement with global giant Philips. It said:

4DX has announced a Memorandum of Understanding (MoU) with Koninklijke Philips N.V. ("Philips"), a leading global healthcare company, to establish a strategic collaboration to expand federal and commercial sales opportunities for XV Technology in the US. Philips are one or the largest providers of medical imaging hardware and software globally and represent a powerful partner, that may accelerate adoption of the LVAS scan by years.

Bell Potter has a speculative buy rating and a $1.40 price target on its shares.

DroneShield Ltd (ASX: DRO)

Bell Potter also believes that this counterdrone technology company is a small-cap ASX share to buy despite its sensational gains this year.

It thinks the company is well-placed to build on a transformational year. It said:

CY23 has been a transformative year for DroneShield, with our estimates anticipating the company to record $69.9m in revenue for the year, approximately 4x the CY22 result ($16.9m). This significant revenue growth has laid the foundation for DRO's first profitable year (BPe NPAT $15.2M), and the company is financially well positioned to capitalise on increasing demand, with $62.5m in cash as of 20-Nov-23. The current contracted order backlog stands at $38m and the sales pipeline is approximately $400m.

Bell Potter has a buy rating and 45 cents price target on its 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 DroneShield. The Motley Fool Australia has recommended DroneShield. 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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