This week I have been looking at the small side of the market at shares that have been tipped to have big futures.
Continuing with that theme, here are two more small caps to watch in 2021:
Cluey Ltd (ASX: CLU)
Cluey is a recently listed education technology company. It landed on the ASX boards in December after raising $30 million at $1.20 per share. This gave it a market capitalisation of approximately $143.5 million. Since then, the Cluey share price has dropped below its offer price and closed the year at $1.10.
Cluey describes itself as an innovative edtech company. It integrates personal tutoring with its scalable technology platforms and utilises data and learning analytics to support the delivery of quality learning to thousands of Australian students.
The company recorded 52,700 learning sessions in the first quarter of FY 2021, up 338% on the same quarter in FY 2020 and up 41% compared to the prior quarter. It is expecting this strong growth to continue and to underpin a 218% increase in revenue to ~$15.5 million in FY 2021.
Openpay Group Ltd (ASX: OPY)
Openpay is a small buy now pay later provider that delivered strong sales and customer growth in 2020. Last month the company revealed that its total transaction value (TTV) in November reached a record of $35.7 million. This was driven by strong Black Friday and Cyber Monday sales, with the former representing the best day of trading in Openpay’s history.
At present the company operates in Australia and the UK, but has recently announced plans to enter the lucrative US market. If this expansion is a success, it could give its TTV a major boost in 2021.
One broker that is bullish on the company is Shaw and Partners. Its analysts have a buy rating and $5.00 price target on its shares at present. This is more than double the current Openpay share price of $2.26.
The broker points out that Openpay’s shares are trading at a significant discount to rivals such as Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P).
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More reading
- ASX sector of the year: BNPL goes from strength to strength
- Here’s how ASX buy now, pay later (BNPL) shares have performed in 2020
- Openpay (ASX: OPY) share price rockets up 8% after major announcement
- The Openpay (ASX:OPY) share price is down 23% in 2 months: Time to buy?
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 ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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