These three small-cap stocks have more than doubled their value in the past 12 months and all posted strong gains on Tuesday.
Bravura Solutions Ltd (ASX: BVS)
On Tuesday, Bravura announced a long-term contract to provide its flagship product – wealth management system Sonata – to the Commonwealth Superannuation Corporation (CSC) as a managed cloud service. CSC will be a major client, as it provides superannuation and pension services to more than 700,000 current and former Australian government employees and members of the Australian Defence Force. Revenue from Sonata in the first half of FY2018 was 35% higher than in the previous corresponding period. Bravura Solutions's share price surged 5% higher to $2.90, 104% up from this time last year.
Afterpay Touch Group Ltd (ASX: APT)
Shares in Afterpay climbed 5.2% higher to $5.91 on Tuesday, as investors buy the dip following a succession of broker downgrades and rumours of imminent regulation that have dragged the stock 20% lower in the space of three weeks. In a business update from last week, the company reported that sales generated by its buy now pay later service declined 3% in the March 2018 quarter compared to the December 2017 quarter – suggesting that the business might be close to peaking in Australia.
Growth prospects now depend mainly on Afterpay's expansion in the USA and how heavily its business will be regulated. Despite the recent fall, the price of the stock is still up 119% from June 2017, when Afterpay merged with Touchcorp.
NRW Holdings Limited (ASX: NWH)
Shares in civil and mining contractor NRW gained 2.4% to $1.30 on Tuesday, up 128% over the past 52 weeks, despite a steep decline in the second half of March. The performance of this stock parallels the recent growth of mining services providers like Ausdrill Limited (ASX: ASL), which doubled its share price over the same period. The advantage of NRW is operating not only in the resources sector, but also in the booming infrastructure space.
While I would stay clear of Afterpay as long as regulatory risk looms over the company and its activities in the US don't take off, I think both NRW and Bravura can enjoy further growth if they continue securing contracts that ensure a healthy revenue stream.
