5 exciting small cap shares I'm watching very closely

LiveTiles Ltd (ASX:LVT) shares are one of five in the small cap space I'm watching closely…

| 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

Over the last 12 months the S&P/ASX Small Ordinaries (Index: ^AXSO) (ASX: XSO) has managed to put on an impressive 19.5% gain, vastly outperforming its large cap rival the S&P/ASX 200.

I believe this gain demonstrates why having a little exposure to small-cap shares can be a good thing for a portfolio.

With that in mind, here are five small-cap shares which I think investors ought to be watching closely today:

Bubs Australia Ltd (ASX: BUB)

Bubs is a goat milk infant formula company which I believe has a lot of potential. I think FY 2019 will be a big year for the company after a solid 12 months which saw Bubs sign countless distribution agreements in China and Australia. This year the market will find out whether these agreements have resulted in a serious lift in sales.

Citadel Group Ltd (ASX: CGL)

Citadel is a growing software and services company that provides integration and managed services solutions to state and federal governments and the private sector in Australia. It is profitable, has strong growth prospects, and very little debt on its balance sheet.

LiveTiles Ltd (ASX: LVT)

LiveTiles is a fast-growing digital workplace platform provider which has caught my eye numerous times over the last 12 months. Most recently it was an announcement revealing a significant lift in annualised recurring revenues (ARR). According to the update, ARR reached $15 million as of June 30, up 275% on the prior corresponding period. In addition to this, the company was recently awarded the 2018 Microsoft US Partner of the Year Award for Modern Workplace Transformation.

Paragon Care Ltd (ASX: PGC)

This fast-growing provider of integrated services to the health and aged care markets recently announced the acquisition of specialised medical distribution company REM Systems for a net enterprise value of NZ$54.4 million. Management expects the acquisition to be highly accretive to earnings in FY 2019, which I think makes its shares great value at the current level.

Specialty Fashion Group Ltd (ASX: SFH)

This retailer looked like it could have been going out of business last year, but it has bounced back strongly in 2018. A successful structural review and the offloading of five retail brands to Noni B Limited (ASX: NBL) has left it with just its fast-growing City Chic brand. The brand's attractive growth outlook has the market and myself bullish again.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Citadel Group Ltd. The Motley Fool Australia has recommended Paragon Care 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 Scott Phillips.

More on Speculative

Man pointing an upward line on a bar graph symbolising a rising share price.
Speculative

Why this speculative ASX stock could rise ~50%

Bell Potter sees potential for big returns over the next 12 months.

Read more »

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Speculative

These speculative ASX mining stocks could rise 85%+

Bell Potter has put speculative buy ratings on these stocks this morning.

Read more »

surprised asx investor appearing incredulous at hearing asx share price
Speculative

'Blockbuster opportunity': This speculative ASX stock could rise 70%

Bell Potter thinks exciting times could be around the corner for this buy-rated high risk stock.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Healthcare Shares

Buy this small cap ASX stock with a 'lucrative opportunity'

Bell Potter thinks this speculative stock could have major upside thanks to its US market opportunity.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Speculative

Broker says this speculative ASX stock could rise over 200%

This high risk option could have major upside according to analysts.

Read more »

Vanadium Resources share price person riding rocket indicating share price increase
Speculative

Meet the speculative ASX stock tipped to rise 180%

Bell Potter thinks this share could almost triple in value.

Read more »

People sit in rollercoaster seats with expressions of fear, terror and exhilaration as it goes into a steep downward descent representing the Novonix share price in FY22
AI Stocks

Brainchip share price tumbles 40% in the past year. What's next?

Brainchip shares have had a topsy-turvy year. So, what’s next for this speculative ASX AI technology stock?

Read more »

A man balances on a tightrope across rocks above the sea at sunset.
Speculative

My top high-risk, high-reward ASX shares to buy in March

If you go into it with your eyes open about the pitfalls, speculative stocks could be fine in a well…

Read more »