Due to the potential returns on offer at the small end of the market, if your risk profile allows, having a little exposure to it could be a good thing for a portfolio.
But which small caps should you look at? Listed below are two small caps that are highly rated. Here’s what you need to know about them:
Bigtincan Holdings Ltd (ASX: BTH)
The first small cap ASX share to look at is Bigtincan. It is an artificial intelligence-powered sales enablement automation platform provider.
The Bigtincan Hub platforms allows users to work with a unified set of productivity tools for creating, editing, annotating, sharing, and collaborating. This helps drive sales, productivity, engagement, and opportunities.
Demand for its platform has been growing strongly, leading to stellar annualised recurring revenue (ARR) growth in recent years. This has continued in FY 2021 despite the pandemic. During the first half of FY 2021, Bigtincan reported a 50% increase in its ARR to $48.4 million.
This went down well with analysts at Morgan Stanley, which put an overweight rating and $1.40 price target on its shares. This compares to the latest Bigtincan share price of 98 cents.
Mach7 Technologies Ltd (ASX: M7T)
This medical imaging data management solutions provider is another small cap to look closely at.
Like Bigtincan, it has been experiencing strong demand for its award-winning enterprise imaging platform in recent years. This has also underpinned very strong ARR growth.
For example, at end of the first half of FY 2021, Mach7’s ARR had grown to $10.2 million. This was up a sizeable 88% on the prior corresponding period.
Positively, this brings it closer to becoming profitable on an operating basis. Management advised that its ARR now provides 64% coverage of its operating expenses.
Morgans is a fan of the company. It recently put an add rating and $1.68 price target on the company’s shares. This compares to the latest Mach7 share price of $1.21.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
More reading
- 2 highly rated small cap ASX shares you need to know
- 3 excellent small cap ASX shares to watch closely
- 3 exciting small cap ASX shares to watch
- Big brokers think these 5 ASX shares can outperform the market
- The Mach7 (ASX:M7T) share price jumps 11% on record quarterly update
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 and recommends BIGTINCAN FPO and MACH7 FPO. The Motley Fool Australia has recommended BIGTINCAN FPO and MACH7 FPO. 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 tipped for big things appeared first on The Motley Fool Australia.
from The Motley Fool Australia https://ift.tt/3vjzPHI
Leave a Reply