5 small cap shares to watch in August

ELMO Software Ltd (ASX:ELO) is one of five small cap shares I would watch closely this month…

| 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

While small cap shares are certainly high up on the risk scale, I believe a little exposure to them can be a good thing for a portfolio.

After all, the S&P/ASX Small Ordinaries (Index: ^AXSO) (ASX: XSO) has vastly outperformed the All Ordinaries over the last 12 months with its 19% gain.

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

Citadel Group Ltd (ASX: CGL)

This under the radar tech share is a specialist in secure enterprise information management. It helps manage information across the health, national security, and defence industries as well as other government departments like education. Which is certainly an in demand service considering how important data security is in the information age.

ELMO Software Ltd (ASX: ELO)

ELMO Software is a leading provider of integrated cloud human resources and payroll software solutions. It provides businesses with a centralised approach that manages an employee's lifecycle from hire to retire. While its growth since its IPO has been impressive, it is still only scratching at the surface of an ANZ market opportunity estimated to be worth upwards of US$770 million per year.

LiveTiles Ltd (ASX: LVT)

LiveTiles is an exciting digital workplace platform provider which is aiming to become a leader in the artificial intelligence industry. It recently announced annualised recurring revenues of $15 million as of June 30, up 275% on the prior corresponding period. I feel its partnership with Microsoft and the appointment of a dedicated sales and marketing team is likely to lead to further strong growth in FY 2019.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara Health Technologies is a tech company specialising in breast imaging analytics and analysis software. It recently released its first-quarter results which revealed a 3.7% share of the U.S. market. Management aims to grow this to 9% by the end of FY 2019. Due to the quality and popularity of its product, I suspect it will achieve this.

Zenitas Healthcare Ltd (ASX: ZNT)

Zenitas Healthcare is a home care and health services company which I believe could benefit greatly from Australia's ageing population. Especially given its solid growth prospects from two recent earnings accretive acquisitions and a Federal Budget which pledged to support older Australian's wishing to live at home instead of in aged care facililties.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended ELMOSFTWRE FPO and VOLPARA FPO NZ. The Motley Fool Australia owns shares of Citadel Group Ltd. The Motley Fool Australia has recommended Zenitas Healthcare Ltd. 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

Speculative

Bell Potter says this speculative ASX stock can rocket 40%

If you have a high tolerance for risk, then it could be worth checking out Vitrafy Life Sciences Ltd (ASX:…

Read more »

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 »