ASX small-cap shares can be exciting ideas if they have good growth potential.
Businesses with smaller market capitalisations aren't followed by as many fund managers or brokers, so there's a higher chance they're undervalued by the market.
The fund manager Wilson Asset Management (WAM) has named two companies with market capitalisations under $1 billion that look like they're mispriced opportunities. These stocks are two of the 20 largest positions inside the WAM Active Ltd (ASX: WAA) portfolio.
WAM aims to look for a catalyst that could raise the share prices of these businesses. A catalyst could be a major event that alters the market's perception of the company or its earnings (potential), sending the share price higher.
Let's get into which two ASX small-cap shares have been named as ideas.
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oOh!Media Ltd (ASX: OML)
WAM described oO!Media as a leading out-of-home media company that connects businesses with public audiences.
In February, the company announced its full-year results for the 12 months to December 2024. This included total revenue of $636 million and adjusted operating profit (EBITDA) of $129 million, which was in line with the December 2024 trading update.
The fund manager explained why it's a position in the portfolio with the following:
We were pleased to see that the momentum in performance has accelerated in CY2025 to date, and oOh!media's commitment to delivering best-in-class services and assets to its clients will drive future market share.
In terms of the outlook, the company said its revenue had grown 14% in 2025 to date in February, while the first quarter media revenue grew 14% year over year. The ASX small-cap share is expecting revenue and market share growth, with further tailwinds expected from future interest rate cuts and overall market growth.
Integral Diagnostics Ltd (ASX: IDX)
WAM described this ASX healthcare share as a business that provides diagnostic services to patients.
It was noted by WAM that Integral Diagnostics recently reported its FY25 half-year result in February, which "fell short of market expectations". This led to a decline in the Integral Diagnostics share price – it dropped 31.7% last month.
The ASX small-cap share reported a statutory loss after tax of $0.4 million due to a continuing clinical staff shortage and labour costs that were higher than expected due to inflation, especially in regional Australia.
Explaining why the fund manager thinks this business is an opportunity, WAM said:
Despite these challenges, we were pleased to see solid revenue growth and believe that the previously completed merger with Capitol Health will provide integral Diagnostics with increased scale, improving margins and driving growth in metropolitan areas.
