Investors with a higher than average tolerance for risk might want to check out the small cap ASX stocks in this article.
That's because they have been named on Bell Potter's Australian equities panel. These are its top picks which it expects to generate strong returns over the medium term.
Here are the small caps the broker is recommending right now:
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Aspen Group Ltd (ASX: APZ)
The first small cap ASX stock that Bell Potter has on its Australian equities panel this month is Aspen Group.
It describes itself as Australia's leading provider of quality accommodation on competitive terms. It notes that its mission is to offer affordable accommodation options to approximately 40% of Australian households with an annual income of less than $90,000.
The broker believes that it stands to benefit greatly from an undersupply in the Australian housing market. It said:
Aspen Group specialises in providing affordable accommodation and is one of Bell Potter's top picks in the real estate space, with a positive runway supported by undersupply in the Australian housing market. Valued at a small discount to NTA and trading at a lower PE compared to the sector average, Aspen is well-positioned for potential upside as it targets ASX 300 inclusion.
Boss Energy Ltd (ASX: BOE)
If you're not averse to investing in the mining sector, then Boss Energy could be a small cap ASX stock to buy according to the broker.
It is the uranium miner that operates the Honeymoon project in South Australia. The broker feels that the market is seriously undervaluing its shares right now. It said:
We continue to see significant value in BOE, with optionality around expansion at Honeymoon via low-risk and cost regional resources at Jasons and Goulds Dam. With the inclusion of Alta Mesa, BOE boasts a geographically diversified multi-asset portfolio with several growth levers yet to be pulled, heading into a uranium bull market.
IPD Group Ltd (ASX: IPG)
A third small cap ASX stock that has been given the thumbs up by Bell Potter is IPD Group.
It is a growing provider of electrical solutions in energy management and automation that is aiming to enhance electrical infrastructure.
Bell Potter believes IPD Group could be a great way to play the electrification megatrend. It explains:
IPD Group distributes electrical equipment and technologies that support energy efficiency in building, infrastructure, and process sectors. Demand for upgrades in existing infrastructure and the scaling of IPG's EV charging business should drive future revenue and market share expansion. The group is well-positioned to capitalise on electrification trends in energy and transportation to support earnings growth.
