If you have a high risk tolerance and want some exposure to the small side of the market, then read on.
That's because Morgans has just put buy ratings on two small-cap ASX shares. Here's what it is recommending to clients:
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Many Peaks Minerals Ltd (ASX: MPK)
Morgans thinks this gold developer could be a small-cap ASX share to buy now.
Following the release of a stronger than expected mineral resource estimate (MRE) for the Ferke Gold Project, it has reaffirmed its speculative buy rating with an increased price target of $2.48 (from $1.92). The broker commented:
MPK delivered a maiden MRE of 26.7Mt at 1.54g/t Au for 1.32Moz at the Ferke Gold Project, a material beat vs our estimate of 1Moz at 1.1g/t Au. Importantly, 1.1Moz of the MRE sits within the Measured and Indicated category, forming the basis of our production scenario. We expect 80-90% of this to convert to reserve given the ideal geometry of the resource and its amenability to mining.
We see further upside as assumptions are refined (geotechnical inputs, process recoveries and additional drilling) as the project progresses toward PFS. We maintain our SPECULATIVE BUY recommendation and lift our price target to A$2.48ps (previously A$1.92ps).
SKS Technologies Group Ltd (ASX: SKS)
Another small-cap ASX share that is highly rated by Morgans is SKS Technologies. It designs, supplies and installs audio visual, electrical, and communication products and services.
The broker likes the company due to its exposure to the booming data centre (DC) market. It believes SKS is well-placed to deliver strong growth through to at least FY 2028.
In light of this, it has retained its accumulate rating on its shares with a revised price target of $6.70. Commenting on the small cap, Morgans said:
SKS's recent contract expansion with its major customer has bolstered the group's outlook, adding a further $80m of work, and broadening its pipeline of FY27 work in hand to $240m. DC sector demand remains robust, with various operators continuing to expand their capex/build activity over the coming years, and we continue to see a significant pipeline of DC build opportunity into FY27-28+.
We upgrade our forecasts by ~13+14% in FY27-28F, reflecting our expectations for SKS to continue building on strong forward levels of work in hand / BAU run-rate into FY27+. We retain our ACCUMULATE rating with a revised PT of $6.70.
