4 small caps with HUGE potential

These 4 small caps could send your returns skyrocketing.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The most exciting investments are the businesses with small capitalisations, but enormous potential.

One company that has grown is Altium Limited (ASX: ALU). It started off as a small company but has now grown to over $1 billion in size.

Here are four companies that have huge potential to grow significantly over the next few years:

National Veterinary Care Ltd (ASX: NVL)

National Veterinary Care is quickly ramping up the number of vet clinics in its portfolio. The veterinary sector is a huge yet fragmented market which provides many opportunities for management to find acquisition targets.

Considering Greencross Limited (ASX: GXL) is its only other listed competitor, I think National Veterinary Care is likely to achieve good growth, particularly as it's only valued at around 25x FY17's estimated earnings and is expected to soon pay a dividend.

Afterpay Holdings Ltd (ASX: AFY)

Afterpay is fuelling the 'buy now, pay later' approach favoured by millennials.

It's growing momentum, with its management revealing another big retailer has signed up almost every quarter. For example, two of its latest customers include Wesfarmers Limited's (ASX: WES) Officeworks and Myer Holdings Ltd (ASX: MYR).

Afterpay isn't yet making a net profit or paying a dividend.

Fastbrick Robotics Ltd (ASX: FBR)

Fastbrick Robotics is the most speculative on this list. It is developing a robot that can do the bricklaying work of a team of labourers in a fraction of the time. This could revolutionise the construction industry and make building properties a much quicker process.

Fastbrick Robotics isn't yet making a profit or paying a dividend.

Pureprofile Ltd (ASX: PPL)

Pureprofile is a survey & marketing company that links consumers and businesses. It seeks to learn about customers' habits through a variety of means and then interpret that data for business management. This is important in an ever-changing consumer market.

It has a presence in Australia, Europe and North America, and is rapidly increasing its reach.

Pureprofile isn't yet making a net profit or paying a dividend.

Foolish takeaway

I think all four of these businesses have a good chance of outperforming the market over the coming years, particularly National Vet Care and Afterpay.

Motley Fool contributor Tristan Harrison owns shares of Altium, Greencross Limited, and NATVETCARE FPO. The Motley Fool Australia owns shares of Altium and Greencross Limited. 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.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »