2 rapidly growing small cap ASX shares to buy

Booktopia Group Ltd (ASX:BKG) and this rapidly growing ASX small cap share could be worth watching closely. Here's why…

| More on:
Cutout icon of a lightbulb surrounded by 3 hands holding out gold coins

Image source: Getty Images

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

If you're a fan of investing in small cap shares, then you may want to look at the ones listed below.

These companies could have very bright futures ahead of them. Here's what you need to know about them:

Booktopia Group Ltd (ASX: BKG)

The first ASX small cap share to look at is Booktopia. It is an online book retailer which has been growing very strongly.

For example, late last month it released its half year update and revealed a record month in December and a record half.

Booktopia shipped a total of 4.2 million units for the six months, up 40% on the prior corresponding period. Impressively, 728,000 of these units were shipped during the final month of the half. This was driven by the shift to online shopping and its investment in additional automation and increased capacity at its distribution centre.

This ultimately underpinned a 52% increase in unaudited half year revenue to $113 million and a 506% increase in adjusted operating earnings to $8 million.

Analysts at Morgans are positive on the company. They recently put an add rating and $3.48 price target on its shares. The broker believes the company is well-placed to grow its market share and benefit from operating leverage.

MyDeal.com.au Limited (ASX: MYD)

MyDeal.com.au is another ecommerce company which could be a good option for small cap investors.

Thanks to the shift to online shopping, which has accelerated over the last 12 months, MyDeal has been growing rapidly. For example, the company recently released its first half update which revealed that gross sales increased 217% over the same period last year to $126.7 million. This was driven by a strong jump in active customers to a record 813,764 and increased repeat use.

Looking ahead, management intends to use the proceeds from its $40 million IPO to drive future growth. This includes growing its private label business and investing in advertising to grow its customer base and brand.

Morgans is also a fan of MyDeal and currently has an add rating and $1.70 price target on its shares.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Unsure man analysing data on laptop.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors endured a rough day of trading this Tuesday.

Read more »

A woman sits in a cafe wearing a polka dotted shirt and holding a latte in one hand while reading something on a laptop that is sitting on the table in front of her
Share Market News

ASX 200 takes the latest RBA interest rate verdict in stride

The ASX 200 looks to have shaken off today’s RBA interest rate call.

Read more »

A mature-aged couple high-five each other as they celebrate a financial win and early retirement
Share Gainers

Why this ASX 300 stock is soaring 12% after a disastrous year

This company has had a dramatic reversal of fortunes this Tuesday...

Read more »

A young woman wearing overalls and a yellow t-shirt kicks one leg in the air showing excitement over the latest ASX 200 shares to hit 52-week highs
Share Gainers

Why Core Lithium, Imugene, Lifestyle Communities, and Mineral Resources shares are charging higher

These shares are having a good session. What's going on?

Read more »

A miner stands in front oh an excavator at a mine site
Broker Notes

Broker says buy the dip on ASX 200 uranium share with 69% upside

Shaw and Partners says this ASX uranium stock is trading at an attractive price point right now.

Read more »

Person with thumbs down and a red sad face poster covering the face.
Share Fallers

Why Domino's, Lynas, Paladin Energy, and St Barbara shares are sinking today

These shares are having a tough session. What's going on?

Read more »

A young woman smiles as she rides a zip line high above the trees.
Share Gainers

4 ASX All Ords shares up 315% to 682% in a year!

Investors have sent these ASX All Ords shares flying higher. But why?

Read more »

Woman on a swing at a beach, symbolising passive income.
Dividend Investing

Overinvested in Fortescue shares? Here are two alternative ASX dividend stocks

Let’s unearth some other passive income opportunities.

Read more »