ASX small-caps are often viewed as higher risk investments – and rightly so.
These stocks often come with increased volatility as many of these companies are pre-profit, awaiting private or government funding, or still developing a product.
These factors can increase the ups and downs of their stock price.
However it's also true that some small-cap companies will grow exponentially and become blue-chip stocks down the track.
So if you are looking for ASX small-caps to add to your watch list this February, here are two with exciting upside thanks to flagship products.
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Medical Developments International Ltd (ASX: MVP)
Medical Developments International is a specialist healthcare company with two key operating segments in analgesia and respiratory devices.
The flagship product, Penthrox ('Green Whistle'), is a self-administered, rapid acting non-opioid analgesic which has been used primarily in the pre-hospital care and emergency setting.
It is currently used in Australia, Asia and Europe which is an important region for further growth (UK / Ireland, France, Nordic regions and rest of Europe).
In respiratory devices the core product is the Space Chamber which optimises administration of inhalers in asthma and COPD.
Last week the company released its quarterly activities report.
Highlights from the report included:
- MVP reported positive operating cash flow (OCF) of $1.1m ($1.9m PcP) and $0.3m for 1H26 ($0.8m PcP)
- Cash receipts in 2Q26 were $10.5m, up 5% on the PcP
- Cash increased to $16.9, up $0.8m on 1Q26.
In a new report from Bell Potter, the broker said Penthrox continues to be the key driver for the company, with 1H26 volume growth of 26% in Australian hospitals, and 10% in the European market.
The broker has a price target of $0.84 on this ASX small-cap.
This indicates an upside of approximately 78%.
Adveritas Ltd (ASX: AV1)
Adveritas is another exciting small-cap stock to watch this month.
The company develops software solutions designed to assist with digital advertising.
It also owns TrafficGuard, which focuses on fraud prevention and campaign optimisation.
Late last month, it released its quarterly update, which included annualised recurring revenue (ARR) ahead of expectations.
Analysis from Bell Potter pointed out that ARR grew $2.1m in Q2 which was similar to the $1.7m in Q1 and $2.6m in Q4 of FY25.
This marks three consecutive quarters of approximately $2m growth.
This prompted a speculative buy rating from Bell Potter along with a price target of $0.22.
From yesterday's closing price of $0.12 per share, this indicates an upside of approximately 83%.
