I think that having a little exposure to small cap shares can be a good thing for a portfolio if your risk profile allows it.
After all, if you can identify the next Afterpay Ltd (ASX: APT) when it is still only a small cap, you could generate mouth-watering returns.
With that in mind, here are three small cap ASX shares which I think are worth watching closely:
Bigtincan Holdings Ltd (ASX: BTH)
Bigtincan is a provider of enterprise mobility software to sales and service organisations. This software has been designed to increase sales win rates, reduce costs, and improve customer satisfaction. This is achieved through improved mobile worker productivity. Demand for Bigtincan Hub has been growing very strongly over the last couple of years and continues to this day. At the end of April the company revealed that it remains on course to achieve its 30% to 40% organic revenue growth target in FY 2020.
Volpara Health Technologies Ltd (ASX: VHT)
Another small cap ASX share to watch is Volpara Health Technologies. It offers cost-effective, mission-critical software that help radiologists deliver the highest-quality breast imaging services. Its software also leverages artificial intelligence imaging algorithms which assist with the early detection of breast cancer. At the end of FY 2020 its annual recurring revenue was up 172% year on year to NZ$18 million. This compares to its estimated US$750 million ARR opportunity in breast cancer screening.
Whispir (ASX: WSP)
A final small cap ASX share to watch right now is Whispir. It is a software-as-a-service communications workflow platform provider. Whispir’s intelligent and powerful workflows aim to revolutionise customer engagement, business resilience, and operational communications. Demand has been increasing very strongly during the pandemic and looks likely to lead to a strong full year result in August. I’m confident there will be more of the same in FY 2021 and beyond.
And here are more exciting shares which could be stars of the future…
One trick to potentially generating life-changing wealth from the stock market is to buy early-stage growth companies when their share prices still look dirt cheap.
Motley Fool’s resident tech stock expert Dr. Anirban Mahanti has identified 5 stocks he thinks are screaming buys. And you can buy them now for less than $5 a share!
* Extreme Opportunities returns as of June 5th 2020
More reading
- 3 great shares to buy now if you’re an ASX 200 investor in your 20s
- EML Payments and these ASX mid cap shares could be destined for big things
- 3 small cap ASX tech shares that could be stars of the future
- Sezzle Inc shares and 2 other small cap ASX techs surge higher today
- 2 exciting small cap ASX shares that could have big futures
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO, BIGTINCAN FPO, VOLPARA FPO NZ, and Whispir Ltd. The Motley Fool Australia has recommended BIGTINCAN FPO, VOLPARA FPO NZ, and Whispir 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.
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