Although it gave back a portion of its gains late on in the year, the S&P/ASX SMALL ORDINARIES (Index: ^XSO) (ASX: XSO) still finished the year with a 9.5% return.
This means the small-cap index outperformed its illustrious rival the S&P/ASX 200 by around 2.5% in 2016. I believe it will be more of the same for small-caps in 2017 and I'll be watching the following four shares very closely.
Appen Ltd (ASX: APX)
Appen is a leading provider of high-quality language data and services to major technology companies, automakers, and government agencies. As technological advances make it easier than ever for businesses to reach global markets, Appen enables them to adapt their products and services to allow them to look and feel native. I believe demand for this service will provide it with significant growth over the next few years.
Bionomics Ltd (ASX: BNO)
In my opinion Bionomics is the most exciting Australian biopharmaceutical company. I believe the company's pipeline of drugs has the potential to transform this small-cap company into a much bigger player in the industry. One key catalyst to make this happen will be its BNC210 anxiety drug. Trials of the drug have thus far been positive. Which is great news as the anxiety treatment market is estimated to be worth up to US$18.2 billion per year by 2020.
Nearmap Ltd (ASX: NEA)
This growing aerial imaging company had a strong 2016, but there could be more to come in 2017 if its US business continues its solid early progress. The company may have angered shareholders with its mixed messages regarding a capital raising late last year, but I don't think they'll mind too much if these funds are used smartly to accelerate growth in the lucrative US market.
Smart Parking Ltd (ASX: SPZ)
Smart Parking provides a number of services for car parks including digital display signage and high-intensity LED lighting that guides drivers to available spaces. At present the company is in 190 car parks worldwide, with a notably strong presence in the United Kingdom. In that particular market Smart Parking has over 120,000 car parking spaces under management and counts McDonalds, Hilton, the NHS, and Matalan amongst its growing client list.
