Small-cap ASX shares were devastated last year, so a contrarian might argue that now is a great time to buy some in anticipation of a 2023 comeback.
But with information more scarce on these businesses and earnings volatile compared to their larger brothers, it's notoriously difficult to pick the right small caps to buy.
Shaw and Partners portfolio manager James Gerrish this week had a couple of ideas that could pique your interest:
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Closely watching UK and US expansion
As a successful homegrown online marketplace, Airtasker Ltd (ASX: ART) listed on the ASX two years ago with much hype.
But the massive 2022 sell-off of cash-burning growth businesses has hit the stock hard. The Airtasker share price has crashed almost 80% since October 2021.
Gerrish's team still thinks the business has much potential.
"We like Airtasker, though concede the market isn't attributing much value to loss-making tech stocks at the moment," he told a Market Matters Q&A.
"We like their model and see it as easily replicable in a number of geographies and will be watching their growth execution in the UK and USA closely."
Professional coverage is sparse on the $100 million Sydney company.
According to CMC Markets, one analyst is recommending Airtasker shares as a strong buy, while one other is rating it as a strong sell.
This stock's ready to shatter records
While many experts are still bullish on the energy sector, Strike Energy Ltd (ASX: STX) is a name investors don't hear very often.
"For those not familiar with Strike Energy, it's a $940 million petroleum exploration business which has [been] trending higher post COVID, albeit in a very volatile manner."
Indeed the Strike Energy stock price has surged 163% since early December 2021.
"It was trading at 38c on Friday afternoon," said Gerrish in another Market Matters Q&A.
"We are bullish Strike Energy, looking for a breakout to new all-time highs above 41 cents."
As of Wednesday morning it had already risen to 40 cents.
Gerrish's team feels like the Western Australian business will cash in on any further global demand for energy.
"Our opinion is mainly based on a bullish outlook for the energy sector and the technical picture towards Strike Energy."
