If you're wanting a little exposure to the small side of the market this month, 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:
DroneShield Ltd (ASX: DRO)
Bell Potter is a big fan of this counterdrone technology company and sees it as a small-cap ASX share to buy.
It believes the company is well-positioned in a market that is expected to grow to be worth ~A$11.5 billion over the next 10 years. It explains:
DRO products are designed to detect and defeat small drones, such as those recently deployed in Ukraine. The company is leveraged to the current trend of global rearmament and the addressable market for counter-drone technology is expected to exceed $7.62 billion USD over the next decade.
The broker also highlights that its sales have been growing rapidly this year and it still has a huge pipeline of opportunities. It adds:
CY23 has been a transformative year for DroneShield, with BPe forecasting the company to record $69.9 million in revenue for the year, approximately 4x the CY22 result ($16.9 million), and achieve profitability for the first time (BPe NPAT $15.2 million). The company currently has a sales pipeline of ~$400 million, with key near term sales opportunities including the roll out of counter-drone technology across US military bases, a $30 million plus framework agreement with a European Government and an Air Services Australia tender to install C-UAS technology across 29 airports.
Bell Potter has a buy rating and 50 cents price target on its shares.
GenusPlus Group Ltd (ASX: GNP)
Another small-cap ASX share that could be a buy is GenusPlus. It provides an integrated service offering to the resources, power, utilities and communications sectors across Australia.
Bell Potter notes that the company is positioned to benefit from the rise of renewable power. It explains:
GenusPlus (GNP) is leveraged to increasing investment in renewable power, battery energy storage and transmission infrastructure on the east coast of Australia; these investments are considered essential for achieving ambitious decarbonisation targets set by state and federal Governments. We expect awarding of a design and construct contract for the HumeLink East project will formalise this multi-decade trend in transmission infrastructure investment while solidifying the company as a tier 1 provider of contracting services for large scale energy infrastructure.
The broker has a buy rating and a $1.50 price target on its shares.
