3 small caps with big potential to buy this week

TPG Telecom Ltd (ASX:TPM) used to be a small cap share and look at it now. Could one of these three shares follow suit?

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A lot can change in eight years, just ask shareholders of telecommunications giant TPG Telecom Ltd (ASX: TPM). Back in 2008 this growing company had a market capitalisation of just $137 million, a mere fraction of its $11 billion market capitalisation today.

Investors that bought TPG Telecom shares on August 15 2008 would have now seen share price gains of an incredible 6,557%. To put that in perspective, a $10,000 investment when its shares were just 19 cents each would now be worth over $665,000.

This in my opinion goes to show that investments in small cap shares with huge potential can be incredibly rewarding. Whilst matching the eight-year return of TPG Telecom might be out of the question, I still expect there to be potentially strong returns for patient investors in these shares.

Catapult Group International Ltd (ASX: CAT)

Catapult provides both the software and hardware used by athletes and sports teams across the world for performance tracking and injury risk monitoring. The company recently completed the acquisitions of US-based XOS Technologies and Ireland's PLAYERTEK. XOS Technologies provides digital and video analytic software solutions to sports teams and appears to be a great acquisition in my opinion. Catapult's management expects it will strengthen its strategic positioning, generate significant synergies, and improve its overall product offering. This is a good thing considering competition in the industry from the likes of STATSports is increasing.

DTI Group Ltd (ASX: DTI)

DTI Group may have a market capitalisation of just $34 million, but this growing provider of integrated surveillance systems and fleet management solutions for the mass transit industry could have a bright future ahead of it in my opinion. So far this year its shares have rocketed higher by 32% following a series of key contract wins. Most recently it announced the receipt of an order for the supply of advanced CCTV surveillance systems for trains in the US city of Philadelphia. I'm very optimistic that its increased investment in marketing and research and development is going to pay off with more contract wins in the next few months. According to management its prospects list across the globe stands at $388 million.

Gage Roads Brewing Co Limited (ASX: GRB)

Gage Roads Brewing Co is a small company that brews, packages, markets and sells award-winning craft beer, cider, and other beverages. At the Australian International Beer Awards in May its Little Dove Draught won two awards, including the prestigious Australian Champion Beer. Since producing a strong fourth quarter result a month ago its share price has jumped higher by around 34%. But still, with a market capitalisation of just $31 million there is a lot more growth to come from this company as far as I'm concerned. It's also worth noting that its largest customer and shareholder with a 23% stake is Woolworths Limited (ASX: WOW).

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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