'Very strong': 2 small-cap ASX shares to buy that you've not been thinking about

If you want to beat the market, you need to think differently. Here are the stocks Glenmore Asset Management is bullish on.

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If you are buying individual ASX shares rather than putting your money into an exchange-traded fund (ETF), the implication is that you're seeking better returns than the market average.

But if you buy the same old large-cap stocks as everyone else, there is not much chance that you will achieve better returns than the index.

That's why it's worth finding some ASX small-cap shares that not many investors are considering, as they could potentially have greater upside.

Certainly now is a great time to grab some bargains, with small cap valuations taking a hammering over the past couple of years.

With interest rate rises potentially ceasing soon and inflation under control, smaller ASX stocks could deliver some pleasant surprises in the coming years.

Here are two small-cap stocks that Glenmore Asset Management is backing at the moment:

Investments flowing in for under-radar firm

GQG Partners Inc (ASX: GQG) is not a stock widely spoken about, but the $4.8 billion company enjoyed a 17% increase in its share price last month.

Glenmore Asset Management portfolio manager Robert Gregory said in a memo to clients that the latest operational numbers from the investment company were impressive.

Created with Highcharts 11.4.3Gqg Partners PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

"GQG announced a strong monthly funds under management (FUM) update, with group FUM increasing from US$98.5 billion [at] end of May, to US$104.1 billion [at] end of June. 

"Net flows for the quarter totalled US$1.2 billion, whilst net flows for FY23 were US$6.3 billion, slightly above what was achieved in FY22."

Indeed Gregory is far from the only professional investor bullish on GQG Partners.

Broking platform CMC Markets currently shows all six analysts that cover the stock rate GQG as a buy.

As well as excellent business performance, there was a further potential catalyst that popped up last week.

"Late in the month, GQG announced its intention to bid for Pacific Current Group Ltd (ASX: PAC)." 

Not just oil and gas clients anymore

Marine service provider MMA Offshore Ltd (ASX: MRM) saw its share soar 13.5% over July.

Similar to GQG Partners, Gregory attributed the rise to a "very positive" earnings announcement.

"The key points were MMA Offshore guided to FY23 EBITDA being in the range of $66 to $68 million, up ~100% vs FY22," he said.

"Trading conditions have continued to be very strong, with second half utilisation averaging 79%, up from 71% in the pcp."

The company has been smart enough to develop new business for renewable energy clients.

"Ongoing strong demand from both oil and gas and offshore wind — a newer but growing segment for MRM — were the drivers of the result."

According to CMC Markets, both Canaccord and Euroz Securities concur with Gregory, rating MMA Offshore shares as a strong buy.

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Mma Offshore. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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