This week I’ve 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:
MNF Group Ltd (ASX: MNF)
The first small cap share to look at is MNF Group. It is a leading provider of Voice over Internet Protocol (VoIP) technology to businesses and consumers.
This technology allows telephone calls to be made over the internet. Due to the NBN rollout and the work from home initiative, demand for MNF’s VoIP services has been growing strongly this year. This led to the company recording a 27% increase in recurring revenue to $101.5 million in FY 2020.
In addition to this, the company revealed a 17% increase in phone numbers on its network to 4.5 million. Management notes that this metric is a key performance indicator for future growth. This bodes well for its performance in FY 2021.
Morgan Stanley is positive on the company. Its analysts currently have an overweight rating and $6.30 price target on its shares.
PlaySide Studios Limited (ASX: PLY)
PlaySide Studios is a recently listed Melbourne-based independent video game developer. It is one of the largest in the country with a total of 52 titles developed. This includes games based on original intellectual property and games developed with Hollywood studios such as Disney, Nickelodeon, and Warner Bros.
In respect to the latter, this includes games related to popular brand including Jumanji, The Walking Dead, Batman, Superman, Teenage Mutant Ninja Turtles, and Disney Pixar’s Cars.
Thanks to these titles, in FY 2020 PlaySide Studios delivered revenue of $7 million, which was up 55% year on year.
This is still only an incredibly small slice of the mobile games market it operates in. Management estimates that this market is worth $77.2 billion per annum at present. This gives it a significant runway for growth in the future.
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More reading
- The PlaySide Studios (ASX:PLY) share price is up 100% since its IPO
- 3 recent ASX IPOs to watch
- Experts pick the best ASX IPO of 2020
- PlaySide Studios (ASX:PLY) share price doubles on ASX debut
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended MNF Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
The post 2 exciting small cap ASX shares to watch in 2021 appeared first on The Motley Fool Australia.
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