'Revenues up 59%': 3 small-cap ASX shares rocketing right now (and set for more gains)

QVG analysts are loving this trio of companies going gangbusters in 2023.

| More on:
three children wearing superhero costumes, complete with masks, pose with hands on hips wearing capes and sneakers on a running track.

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

Small-cap ASX shares were thoroughly demolished in the past 18 months, but there are now some green shoots showing up.

In a memo to clients, the team at QVG Capital Long Short Fund named three such stocks that have rocketed in recent times, which it is still backing for further gains:

'High energy, entrepreneurial culture'

Mader Group Ltd (ASX: MAD) is an outsourcer for clients in the mining industry.

On the back of its latest numbers, the stock has soared an eye-opening 37% year to date.

"Their update showed revenues up 59% and was particularly pleasing given their March quarter is typically seasonally weak."

There are two reasons why the QVG analysts reckon Mader shares are set for further rises.

"Firstly, their customer is paying a discount to what an OEM would charge and only a small premium to what it would cost to do it 'in house'," read the memo.

"Considering the additional quality and flexibility this means good value for the customer."

The other tailwind is that, despite it now having a $1 billion market capitalisation, Mader has maintained a "high energy, entrepreneurial culture" first established by founder and chair Luke Mader.

"A highly incentivised and fast paced team is exactly what's required to expand successfully into new markets, as is Mader's strategy."

73% gain already this year

Dental centre network Pacific Smiles Group Ltd (ASX: PSQ) has seen its share price take off 28% over the past three weeks.

The QVG team noted that the company last month reaffirmed its earnings guidance.

"When people talk about stocks being cheap on a price-to-earnings or PE ratio, we remind ourselves this is only true if you use the right 'E'," read the memo.

"This update confirms that trading has improved and removes uncertainty around the 'E'." 

Created with Highcharts 11.4.3Pacific Smiles Group + Duratec PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

Mader and Pacific Smiles have done pretty well in 2023, but they are not even in the same ballpark as Duratec Ltd (ASX: DUR).

The share price for the infrastructure maintenance contractor has gained a spectacular 73% since the start of the year.

The QVG note mentioned that in April the company boosted its earnings guidance by 12%.

"The rate of contract wins, the performance of their recent acquisition WPF and the absence of problem projects underpins Duratec's guidance and outlook."

The conservative nature of the projects Duratec's management takes on is a big bonus for QVG analysts.

"We are only aware of a few problem projects in their history, which is testament to their internal controls and the nature of the jobs and customers they're willing to take on."

Should you invest $1,000 in Flight Centre Travel Group Limited right now?

Before you buy Flight Centre Travel Group Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Flight Centre Travel Group Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 7 February 2025

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Mader Group. The Motley Fool Australia has positions in and has recommended Mader Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Broker Notes

Three guys in shirts and ties give the thumbs down.
Broker Notes

3 reasons to sell Guzman y Gomez shares right now

Goldman Sachs thinks now is the time to sell this fast-food stock.

Read more »

ASX shares Business man marking buy on board and underlining it
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

Smiling couple looking at a phone at a bargain opportunity.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A female broker in a red jacket whispers in the ear of a man who has a surprised look on his face as she explains which two ASX 200 shares should do well in today's volatile climate
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Broker Notes

These ASX 200 shares could rise 10% to 40%

Analysts are tipping these shares to deliver big returns over the next 12 months.

Read more »

A woman presenting company news to investors looks back at the camera and smiles.
Broker Notes

Down 26%! Buy this ASX 200 stock while it's dirt cheap

Bell Potter thinks this blue chip has been oversold and is in the buy zone now.

Read more »

Rising share price chart.
Broker Notes

Morgans says these top ASX stocks could rise 15% to 20%

The broker thinks these shares could be heading higher from here.

Read more »

Man in mining hat with fists raised and eyes closed looking happy and excited about the Newcrest share price
Broker Notes

'Gamechanger': Top broker says this ASX mining share can rise over 100%

Big returns could be on the cards for buyers of this speculative mining stock according to Bell Potter.

Read more »