I think that having a little bit of exposure to the small side of the market can be a positive for a portfolio.

This is because even blue chip companies such as Ramsay Health Care Limited (ASX: RHC) were small caps at one stage.

Anyone that bought Ramsay’s shares in the early days and held onto them will have generated exceptionally strong returns.

And although not all small caps will be success stories, there are a few that I feel have a good chance of going onto bigger and better things.

Three small ASX cap shares worth watching very closely are as follows:

Audinate Group Limited (ASX: AD8)

Audinate is a digital audio-visual networking technologies provider. It has achieved very strong sales growth in recent years thanks to the increasing demand for its Dante product. This award-winning audio over IP networking solution is being used widely across the professional live sound, commercial installation, broadcast, and recording industries globally. While the pandemic will inevitably impact its sales greatly, I believe its growth will accelerate once the crisis passes.

ELMO Software Ltd (ASX: ELO)

ELMO Software is a fast-growing cloud-based human resources and payroll software company. It provides a unified platform that allows users to streamline processes for employee administration, recruitment, on-boarding, learning, performance, remuneration, compliance training and payroll. It has been a strong performer over the last few years and I expect more of the same in FY 2020 and beyond. ELMO recently released its third quarter update and revealed quarterly cash receipts of $13.3 million. This was up an impressive 39.4% on the prior corresponding period. It brought its 12-month trailing cash receipts to $56.2 million, up 42.3% on the 12 months to March 2019.

Volpara Health Technologies Ltd (ASX: VHT)

A third small cap share to look at is Volpara Health Technologies. It is a provider of healthcare software that leverages artificial intelligence imaging algorithms to assist with the early detection of breast and lung cancer. It has been growing at a very strong rate over the last few years thanks to its increasing market share in North America. And due to the growing popularity of its software with radiologists and recent acquisitions, I expect this positive form to continue for the foreseeable future.

More reading

• 3 ASX healthcare shares to buy for strong long-term growth
• The next ASX sector in a post COVID-19 earnings upgrade cycle
• 2 of the best ASX 200 healthcare shares to buy for the long term
• Why Altium, ELMO, Suncorp, & Webjet shares are sinking lower
• 3 exciting ASX healthcare shares to watch in the 2020s

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 Elmo Software. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO and VOLPARA FPO NZ. The Motley Fool Australia has recommended Elmo Software and Ramsay Health Care Limited. 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.

The post These small cap ASX shares could be stars of the future appeared first on Motley Fool Australia.

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I am particularly interested in the ASX healthcare sector due to the growing number of high-quality companies that are now listed, many of which have seen strong share price growth over the past 5 years.

In addition, I believe the demand for healthcare services is only going to grow over the next decade due to an ageing global population and continuing advances in healthcare treatments and technology.

With that in mind, here are 3 of my top picks in the ASX healthcare space right now:

Ramsay Health Care Limited (ASX: RHC)

Over the past decade, global private hospital provider Ramsay has experienced strong revenue growth from its existing facilities, as well as growing through acquisitions and expanding into new markets. It has now achieved considerable size and scale, which therefore spreads its operating costs and provides it with a distinct competitive advantage in negotiations with health insurers.

Ramsay has been impacted by the ban on non-essential surgeries across the countries in which it operates. However, with elective surgeries beginning to recommence in Australia, and with other markets likely to soon follow, it may merge from its troubles faster than anticipated.

As one of the largest hospital providers in the world, with operations across 11 countries, I believe that Ramsay is well-positioned to capitalise on the growing need for healthcare services over the next decade.

Cochlear Limited (ASX: COH)

Cochlear has been significantly impacted by the coronavirus crisis as elective surgeries, such as those for cochlear implants, have been deferred across a number of countries in which it operates. This led to Cochlear raising $880 million from an institutional placement in late March.

However, with the Cochlear share price taking a significant hit over the past few months, and the hope that elective surgeries may soon commence across a number of its markets, I believe now could be a good buying opportunity.

As the proportion of the global population over the age of 65 continues to increase, I think the demand for hearing products and solutions over the next few decades will only rise.

ResMed Inc (ASX: RMD)

ResMed has evolved over the last 30 years to become one of the world’s leading sleep treatment companies. It is now a major US-based global company, employing more than 7,00 people worldwide.

The company’s healthcare devices and cloud-based software solutions target sleep apnea and other respiratory conditions. Its global scale and breadth now provide it with a distinct advantage over its competitors. The company recently recorded an impressive 47% increase in net income during the third quarter of FY 2020.

I believe that the strong demand for ResMed’s products is likely to continue over the next decade, driven by the largely untapped market of sleep apnea sufferers globally.

More reading

• The next ASX sector in a post COVID-19 earnings upgrade cycle
• Got $3,000 to invest? Here are 2 fantastic ASX 200 shares to buy right now
• 2 of the best ASX 200 healthcare shares to buy for the long term
• Leading brokers name 3 ASX shares to sell today
• Why CSR, Kogan, Premier Investments, & ResMed shares are storming higher

Phil Harpur owns shares of Cochlear Ltd. and ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd., Ramsay Health Care Limited, and ResMed Inc. 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.

The post 3 ASX healthcare shares to buy for strong long-term growth appeared first on Motley Fool Australia.

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Many S&P/ASX 200 Index (ASX: XJO) dividend shares are on sale right now. Investors have been spooked by the recent bear market and the economic outlook remains a little cloudy.

However, that means share prices may be disconnected from the underlying value of many companies. In fact, an article in the Australian Financial Review indicates that retail investors were busy buying and selling in February and March.

Now, smart investors know when to hold and when to fold. A period of unprecedented volatility that smashed shares is not the time to fold.

Having said that, here’s one ASX 200 dividend share that could be in the buy zone today.

One ASX 200 dividend share to buy today

I like the look of BHP Group Ltd (ASX: BHP) right now. I think the Aussie large-cap has a lot going for it and could be in the buy zone.

BHP shares have slumped 19.11% lower so far this year. That’s a pretty big fall for a company of BHP’s size. The Aussie iron ore miner currently boasts a market capitalisation of $148 billion, which means when it moves, the ASX 200 moves.

Apart from the size factor, BHP is a solid ASX 200 dividend share. The mining group’s shares are yielding 6.73% right now, although I wouldn’t count on that being maintained.

The current environment is making companies wary of spending additional cash. While shareholders still want to be paid, maintaining business stability throughout the next 6 to 12 months is critical.

You may be wondering why you’d buy an ASX 200 dividend share that may slash its dividend. I think the key here is to remember that us Fools invest for the long-term.

The BHP share price has been hammered in 2020 but I think the fundamental environment looks OK. China’s economy is picking back up and we could see a boost to Aussie infrastructure to help mitigate the impacts of a likely recession.

That means BHP could be an absolute steal for its current $31.67 per share valuation.

More reading

• What to watch on the ASX 200 next week
• Are rental yields better than dividend yields?
• These were the best performing ASX 200 shares last week
• Buy these ASX 200 shares for your kids today
• Why a buy and hold strategy for ASX shares is best

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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