If you have a higher-than-average tolerance for risk, it could be worth considering a little exposure to the small side of the market for a balanced portfolio.
Right now, the team at Bell Potter sees significant value on offer with the small-cap ASX share in this article.
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Which small-cap ASX share?
The small-cap that Bell Potter is tipping as a buy is Praemium Ltd (ASX: PPS).
It is a growing investment platform and branded online portfolio administration service provider.
The broker notes that following the launch of Spectrum in 2024, the small-cap ASX share integrates heritage managed models with broader investment options for a complete high net worth value proposition.
Bell Potter was pleased with Praemium's performance in the first half of FY 2026 and believes synergies are on the way. It said:
PPS delivered a strong result, consistent with prior aspiration for double digit revenue growth and slight operational leverage. PPS does not provide net inflow guidance but mentioned it expects meaningful flows to follow the recent client onboarding. Things generally sound better with PPS now on track to realise +$3m run-rate EBITDA from OV before incrementing. Levers to achieving this include the final FTE synergies, and ending of the TSA, completed in Feb'25, providing confidence in the target.
Commenting on the result, the broker adds:
Pro-forma revenue of $56.0m was up +5% on pcp against our $55.6m forecast with Platform revenue ex-churn from OV up +10% on pcp. […] EBITDA of $15.2m was up +18% on pcp. PPS continued to exercise measured cost growth around mid-single digits and captured some initial synergies, the net effect of this driving outperformance against our $14.8m forecast. Below EBITDA line, items were broadly in-line with our thinking, where NPAT of $8.7m was up +11% on pcp.
Big potential returns
The broker sees potential for Praemium's shares to rise strongly from current levels. According to the note, it has retained its buy rating and $1.20 price target on its shares.
Based on its current share price of 71 cents, this implies potential upside of approximately 69% for investors over the next 12 months.
Overall, Bell Potter believes that things are looking up for this small-cap and is expecting double-digit revenue growth through to at least 2028. It concludes:
PPS offered little surprises and remains well placed to reinvigorate sales growth while making the operations leaner. Our Buy rating is unchanged and we continue to see an opening to achieve double digit revenue growth, amplified through cost-out measures.
