3 super small-cap ASX shares that could be destined for big things

Are you wanting some exposure to the small side of the market? If you are, then Bell Potter has you covered.

It has named three small-cap ASX shares that could be top picks for investors in February. Here’s what it is recommending to clients:

Integral Diagnostics Ltd (ASX: IDX)

This diagnostic imaging company is highly rated by Bell Potter, especially after its merger with Capitol Health. The broker sees plenty of growth opportunities from greenfield and brownfield investments, as well as M&A opportunities. It said:

The merger between Integral Diagnostics and Capitol Health results in a diagnostic imaging (DI) company which operates 151 clinics throughout Australia. Its strongest presence will be within Victoria and Queensland (67 & 41 locations respectively) with minor penetration in the other States. The company offers a range of imaging modalities through its clinics with the largest contribution to revenue from CT (31%) followed by US (24%), MRI (13%) and X-Ray / Diagnostic Radiology (11%), and Nuclear Medicine PET (5%). The growth strategy has centred around a combination of greenfield & brownfield investments and M&A opportunities.

Kinatico Ltd (ASX: KYP)

Another small-cap ASX share that has been recommended as a buy by Bell Potter is technology company Kinatico. It provides CV checks and workforce compliance management solutions.

The broker is positive on the company’s growth outlook. It said:

Kinatico is a leading provider of “know your people” solutions to organisations in Australia and New Zealand. The company operates two key businesses: its legacy CVCheck brand, which provides employment screening and verification services to over 10,000 repeat corporate customers and its new key focus, a SaaS-based business that delivers real-time workforce compliance management and monitoring. The core strategy is to leverage the large customer base of the legacy CVCheck business to provide a ready-made sales pipeline for its higher growth SaaS compliance solutions.

Universal Store Holdings Ltd (ASX: UNI)

A third small-cap ASX share that is being recommended by Bell Potter is youth fashion retailer Universal Store.

The broker highlights Universal Store’s strong growth outlook, which is being underpinned by its store rollout strategy, and cheap valuation as reasons to buy. It said:

Universal Store Holdings is a leading youth focused apparel, footwear and accessories retailer in Australia. UNI will continue to increase store numbers over the next few years, supporting earnings growth of 10% p.a.. Valuation looks attractive, trading on a forward P/E of ~16x. UNI is a quality small cap (ROE ~26%) that is executing on its rollout strategy.

The post 3 super small-cap ASX shares that could be destined for big things appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Universal Store. 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 Integral Diagnostics and Universal Store. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.