• 3 high quality ASX shares to buy next month

    3 asx shares to buy depicted by man holding up hand with 3 fingers up

    With a new month upon us, now could be a good time to consider making some new additions to your portfolio.

    Listed below are three high quality ASX shares that could be great options for April. Here’s what you need to know about them:

    Adore Beauty Group Limited (ASX: ABY)

    Adore Beauty is a beauty-focused ecommerce company that has been growing very strongly in FY 2021. Last month the company released its half year results and revealed an 85% increase in revenue to $96.2 million and a 188% jump in operating earnings to $5.2 million. Positively, this is still well short of its overall market opportunity. And thanks to the shift online and the low penetration of beauty sales online compared to other Western markets, Adore Beauty looks well-placed for growth over the long term.

    UBS is positive on the company. It recently put a buy rating and $6.20 price target on its shares.

    CSL Limited (ASX: CSL)

    Another ASX share to consider is CSL. This biotechnology’s CSL Behring business has a portfolio filled with lucrative life-saving plasma therapies. Whereas its Seqirus business has a range of important influenza vaccines and anti-venom products. Between the two businesses, CSL is generating billions of dollars of sales each year and reinvesting ~11% of this back into its research and development activities. This has resulted in the company having a number of exciting products under development with the potential to underpin solid long term earnings growth. 

    Citi recently upgraded CSL’s shares to a buy rating with a $310 price target.

    REA Group Limited (ASX: REA)

    A final ASX share to consider buying is REA Group. It is of course the dominant player in real estate listings in the Australian market with its realestate.com.au website. In addition to this, the company has a collection of complementary businesses in the local market and a number of international brands. REA Group looks well-placed for growth in the coming years thanks to the improving housing market, new revenue streams, cost cutting, and price increases.

    Morgan Stanley is positive on the company’s prospects. It has an overweight rating and $175.00 price target on its shares.

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    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 CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Adore Beauty Group Limited. The Motley Fool Australia has recommended REA Group Limited. 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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  • 2 of the best blue chip ASX shares to buy in April

    Arisrtocrat share price value and growth ASX shares

    Have you got room for a blue chip or two in your portfolio? If you are, then take a look at the blockbuster blue chip shares listed below.

    Here’s why they are highly rated:

    ResMed Inc. (ASX: RMD)

    The first blue chip share to look at is ResMed. It is one of the world’s leading medical device companies.

    ResMed’s focus is primarily on the sleep treatment market and has a portfolio full of industry-leading solutions for sleep apnoea, insomnia, CPAP, and snoring. These products are available in more than 70 countries worldwide thanks to its direct offices and network of distributors.

    Positively, the company invests heavily in its research and development, ensuring it stays ahead of the competition. Which certainly is a good thing given the size of the market. Management estimates that there are ~1 billion people suffering from sleep apnoea worldwide. However, the vast majority of these sufferers have yet to be diagnosed. This gives ResMed a significant runway for growth.

    Morgans is positive on ResMed’s prospects. It recently retained its add rating and put a price target of $30.09 on its shares. The ResMed share price ended the week at $24.88.

    Xero Limited (ASX: XRO)

    Another blue chip ASX share to consider buying is Xero. It is a highly rated provider of a cloud-based business and accounting solution to small and medium sized businesses.

    Like ResMed, Xero has a very large global market opportunity to grow into over the next decade. In addition to this, it has the opportunity to squeeze more and more revenue out of its users via its burgeoning app ecosystem.

    It is due to this app ecosystem that Goldman Sachs believes Xero has a multi-decade runway for strong growth.

    In light of this, it will come as no surprise to learn that the broker has a buy rating and $157.00 price target on its shares at present. This compares to the latest Xero share price of $127.20.

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    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 Xero. The Motley Fool Australia has recommended ResMed Inc. 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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  • Top brokers name 3 ASX shares to buy next week

    finger pressing red button on keyboard labelled Buy

    Last week saw a number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.

    Here’s why brokers think investors ought to buy them next week:

    Bapcor Ltd (ASX: BAP)

    According to a note out of Citi, its analysts have retained their buy rating and lifted their price target on this auto parts retailer’s shares to $9.35. The broker notes that Bapcor has made an investment Tye Soon in Asia. Citi believes the deal will give the provide the company with opportunities to rollout across the region. For example, the broker estimates that over the long term Bapcor could have a network of over 450 stores across the South Korea and Malaysia markets, where Tye Soon has a decent presence. The Bapcor share price ended the week at $7.69.

    PolyNovo Ltd (ASX: PNV)

    A note out of Macquarie reveals that its analysts have upgraded this medical device company’s shares to an outperform rating with an improved price target of $3.20. According to the note, the broker believes PolyNovo is well-placed to grow its market share. It also notes that the company is exploring additional opportunities in the treatment of chronic wounds and hernia. These are significant markets and could give its long term sales growth a major lift if successful. The PolyNovo share price was fetching $2.85 at Friday’s close.

    Telstra Corporation Ltd (ASX: TLS)

    Analysts at Ord Minnett have retained their buy rating and $4.05 price target on this telco giant’s shares following its corporate restructure update. According to the note, the broker sees value in its plan of splitting into four subsidiaries. Ord Minnett also believes that Telstra can continue paying a 16 cents per share fully franked dividend for the foreseeable future. The Telstra share price ended the week at $3.41.

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    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 POLYNOVO FPO. The Motley Fool Australia owns shares of and has recommended Bapcor and Telstra Limited. 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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  • 2 secret ASX dividend shares with large yields

    seedling plants growing out of rolls of money representing growth shares

    There are some smaller ASX dividend shares out there that have large dividend yields.

    A dividend yield isn’t based on the size of the business, but it’s about the dividend payout ratio and the valuation of the company.

    These two businesses have relatively small market capitalisations, but higher-than-normal dividend yields:

    360 Capital REIT (ASX: TOT)

    This is a real estate investment trust (REIT) that’s operated by 360 Capital Group Ltd (ASX: TGP).

    360 Capital REIT invests in a wide range of real estate-based investment opportunities. Before COVID-19 it had been focusing on making real estate loans.

    However, at the moment it is mostly investing in other real estate businesses. For example, it has invested in Peet Limited (ASX: PPC) and Irongate Group (ASX: IAP). 360 Capital REIT has also entered into a 50% equity partnership with PMG Group, a New Zealand based diversified commercial real estate funds management business.

    PMG manages five unlisted funds, three single-property syndicates, with 42 properties and NZ$665.7 million of funds under management (FUM).

    360 Capital said this partnership provides it with an investment in a growing funds management platform with a long track record and diversification through exposure to the New Zealand real estate market. It gives the company the opportunity to earn fee income from funds management and underwriting activities.

    The ASX dividend share has a forecast FY21 distribution guidance of 6 cents per security, this translates into a distribution yield of 6.7%.

    Pacific Current Group Ltd (ASX: PAC)

    Pacific Current is a company that invests in fund managers across the globe and helps them grow with expertise and capital.

    It’s invested in a number of different managers and they are steadily growing their funds under management (FUM), which is growing management fees.

    In the recent FY21 half-year result, Pacific Current Managing Director CEO and chief investment officer Mr Paul Greenwood explained the benefit of this:

    As you look at these results you will see that more of PAC’s earnings are coming from management fees, which are more repeatable than performance fees or commission revenues. This means that the organic profitability of the business continues to grow nicely, and we expect this trend to continue.

    Despite the strengthening of the Australian dollar against the US dollar, management fee revenue grew 10% and operating expenses fell 24%.

    Pacific Current also recently invested into Astarte Capital Partners which is based in London and it’s focused on private markets real asset strategies. The ASX dividend share said this investment has the potential to become one of its larger investments in the future. It will receive approximately 40% of net income from this investment.

    It’s going to continue to focus on finding private capital asset management outfits with unique business models operating within niche market segments.

    The company is expecting fundraising to accelerate through the rest of the 2021 calendar year and into 2022. It’s also expecting to make at least one more investment in FY21.

    It has a trailing grossed-up dividend yield of 9.1% at the current Pacific share price.

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    Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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  • Top brokers name 3 ASX shares to sell next week

    man scratching his head as if asking whether the bhp share price is in the buy zone

    Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

    Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

    Aurizon Holdings Ltd (ASX: AZJ)

    According to a note out of Goldman Sachs, its analysts have retained their sell rating and $3.66 price target on this rail freight company’s shares. The broker notes that the floods in New South Wales have impacted the state’s coal network rail corridor. Goldman believes this poses a risk for Aurizon meeting its guidance for the full year. In addition to this, looking longer term, the broker has concerns over the deterioration of the long term outlook for global coal demand. The Aurizon share price ended the week at $3.88.

    Bubs Australia Ltd (ASX: BUB)

    A note out of Citi reveals that its analysts have retained their sell rating and 35 cents price target on this infant formula company’s shares. According to the note, the broker believes that competition is heating up in the China market thanks to a resurgence in domestic brands. Citi expects this to weigh on Bubs’ performance. In addition to this, the broker notes that there is a lot of uncertainty in respect to its pathway to profitability. Particularly given the issues it is facing in the daigou channel. The Bubs share price was fetching 51 cents at Friday’s close.

    Unibail-Rodamco-Westfield CDI (ASX: URW)

    Analysts at Ord Minnett have downgraded this shopping centre operator’s shares to a sell rating with a reduced price target of $3.70. According to the note, the broker made the move partly on valuation grounds and to reflect a stronger Australian dollar. In addition, it believes its outlook is uncertain given the challenges it is facing with its deleveraging plan. The Unibail-Rodamco-Westfield share price ended the week at $5.13.

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    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 BUBS AUST FPO. The Motley Fool Australia has recommended Aurizon Holdings Limited and BUBS AUST 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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  • Why I’d buy dirt-cheap shares now and aim to hold them for a decade

    cheap shares represented by hand crossing out the 'un' in 'unaffordable' using red marker

    A strategy of buying dirt-cheap shares and holding them for the long-run has been relatively successful in the past.

    After all, it allows an investor to take advantage of the market cycle by buying undervalued shares in uncertain periods and holding them through long-term recovery.

    Of course, such a scenario is by no means guaranteed. Some cheap stocks may fail to bounce back from their present woes.

    However, a likely economic recovery and low share prices for some high-quality businesses suggest that now could be a sound moment to buy a diverse range of undervalued stocks.

    High-quality companies with dirt-cheap shares

    Some dirt-cheap shares deserve their low prices at the present time. For example, they may have strategies that cannot be easily adapted to a rapidly-changing world economy. Or, they could have weak financial positions that do not allow them to invest where necessary to become more competitive.

    However, in other cases, today’s cheap stocks could offer good value for money. Certainly, some companies face challenging futures caused by economic woes.

    However, they may have access to large amounts of liquidity to strengthen their financial prospects. Equally, they could have a long track record of recovering from similar scenarios. Therefore, their valuations may not fully reflect their capacity to deliver improving financial performances in the coming years.

    A track record of recovery

    Predicting how dirt-cheap shares will perform in future is extremely challenging. After all, the future is always a known unknown. However, the past performance of the economy suggests that improving operating conditions are likely to be ahead.

    After all, no economic downturn has ever lasted in perpetuity. This suggests that many of today’s cheap stocks could enjoy higher demand for their products and services in future.

    Moreover, the scale of monetary policy stimulus announced during the coronavirus pandemic indicates that a brighter economic outlook could be ahead.

    As vaccine rollouts continue and lockdowns fade, consumer spending and economic growth could react positively. This may mean that many of today’s dirt-cheap shares may benefit from a return to normality over the coming months and years.

    Buying undervalued shares

    Clearly, not all dirt-cheap shares will recover from their low price levels. Therefore, it is important to be selective about the companies that are added to a portfolio.

    This can mean avoiding those businesses that have less financial stability, or that operate in industries that may become increasingly obsolete in the coming years.

    While a stock market rally may have taken place, not all companies have surged in price over recent months.

    Through buying cheaper businesses and holding them for the long run, it may be possible to enjoy greater scope for capital returns as a likely economic recovery replaces recent difficulties to provide improved operating conditions.

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    Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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  • 2 stellar ASX tech shares to buy in April

    rise in asx tech share price represented by digitised rocket shooting out of person's hand

    Due to the quality on offer in it, the tech sector could be a great place to make long term investments.

    But which shares should you look at? Two exciting ASX tech shares that have been given buy ratings are listed below. Here’s why they might be shares to buy:

    Life360 Inc (ASX: 360)

    Life360 is a San Francisco-based company that provides families with a market leading app that create tools that remove uncertainty from modern life.

    Among its many features are real-time location sharing and notifications and driving safety features like Crash Detection and Roadside Assistance.

    Life360’s app is proving to be very popular with families. In fact, at the last count, the company had more than 25 million monthly active users (MAU) across 195 countries. And that’s at a time with low levels of mobility because of the pandemic.

    Bell Potter is a fan of Life360. Its analysts currently have a buy rating and $7.70 price target on its shares. The broker notes that the company is carving out a significant global footprint with its family app at the core. Furthermore, it is expecting the company to benefit greatly once the pandemic passes and people are on the move again.

    Volpara Health Technologies Ltd (ASX: VHT)

    Another ASX tech share to look at is Volpara. It is a New Zealand-based healthcare technology company best known for its VolparaEnterprise software solution.

    VolparaEnterprise is a cost-effective, mission-critical tool that helps clinics deliver the highest-quality breast imaging services. This high quality software has been growing rapidly in popularity, leading to strong market share gains.

    So much so, at the end of the third quarter of FY 2021, Volpara reported that its software was used in over 27% of screenings for women in the United States.

    As well as the core VolparaEnterprise product, Volpara has been developing and acquiring complementary software. These add-ons are expected to drive a significant increase in average revenue per user (ARPU) in the future. In fact, management estimates that its whole suite is worth US$10 per user. This is notably more than its current ARPU of US$1.22.

    Morgans is a big fan of Volpara. Earlier this month the broker put an add rating on its shares and lifted its price target to $1.94.

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    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 VOLPARA FPO NZ. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Life360, Inc. The Motley Fool Australia has recommended VOLPARA FPO NZ. 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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  • 2 growing ASX dividend shares to buy

    fingers walking up piles of coins towards bag of cash signifying asx dividend shares

    Are you looking to boost your income with some dividend shares? Then you might want to consider the ones listed below.

    Here’s why analysts have given them buy ratings:

    People Infrastructure Ltd (ASX: PPE)

    People Infrastructure is a leading workforce management company that provides companies with innovative solutions to workforce challenges.

    It has been growing strongly over the last couple of years. For example, in FY 2020, People Infrastructure reported a 49.2% increase in normalised EBITDA to $26.4 million.

    It followed this up with a solid half year result in February. For the six months ended 31 December, the company recorded a 3.1% increase in revenue to $201 million and a 51.5% increase in normalised net profit to $14.8 million.

    Since then, the company has entered into a binding agreement to acquire the SwingShift Nurses business.This business is forecast to generate $1 million in operating earnings in the first 12 months following completion.

    Morgans is a fan of the company. It recently retained its add rating and lifted its price target to $4.22. The broker is also forecasting a fully franked dividend of 13 cents per share in FY 2021.

    Based on the latest People Infrastructure share price of $3.67, this represents an attractive 3.5% dividend yield.

    Sonic Healthcare Limited (ASX: SHL)

    Another ASX dividend share to consider buying is Sonic Healthcare. It is a leading medical diagnostics company with operations across the world.

    Sonic Healthcare has been an even stronger performer than People Infrastructure in FY 2021. Last month it released its half year results and reported a 33% increase in revenue to $4.4 billion and a 166% jump in first half net profit to $678 million.

    And while COVID-19 testing was a key driver of this growth, the rest of its business also performed positively.

    The good news is that COVID testing continues to be strong and is expected to remain that way for at least the rest of 2021. This bodes well for its performance in the second half and FY 2022.

    Credit Suisse is bullish on the company and has an outperform rating and $40.00 price target on its shares. The broker is also expecting a 93 cents per share partially franked dividend in FY 2021 and a 97 cents per share dividend in FY 2020. Based on the current Sonic Healthcare share price, this will mean yields of 2.6% and 2.7%, respectively.

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    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 People Infrastructure Ltd. The Motley Fool Australia has recommended People Infrastructure Ltd and Sonic Healthcare Limited. 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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  • These top 2 ASX shares should be on your watchlist

    ASX share price on watch represented by man looking through magnifying glass

    There are some top ASX shares that may be worth a spot on your watchlist because of their strong business plans.

    The below businesses are generating good growth, expanding their businesses and getting the attention of investors:

    Baby Bunting Group Ltd (ASX: BBN)

    Baby Bunting is the largest retailer of baby and infant products. It has been operating for over 40 years and it now has 59 stores with plans for up to 100 stores.

    In July 2020, Baby Bunting started shipping online orders to New Zealand. It has announced plans to launch a multi-channel retail offering in New Zealand with the first store anticipated to open in FY22 as part of a network plan of at least 10 stores. The ASX retail share noted there are no large format baby specialty retail chains in the market.

    Morgans is one of the brokers that rates Baby Bunting as a buy with a price target of $6.39 – it likes the move into New Zealand because it improves the growth runway even more.

    Baby Bunting had a particularly strong first half of FY21 – total sales increased by 16.6% to $217.3 million, with online sales going up by 95.9%. The gross profit margin improved by 41 basis points to 37.4%, pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) increased 29.7% to $18.5 million and pro forma net profit after tax (NPAT) grew 43.5% to $10.8 million.

    The growth has continued into the second half of FY21, with comparable store sales growth for the first six weeks of 18.5%.

    According to Morgans, the Baby Bunting share price is valued at 28x FY21’s estimated earnings.  

    Reject Shop Ltd (ASX: TRS)

    Reject Shop aims to provide great value on everyday items. It sells some brands like Cadbury, L’Oreal, Nivea, Finish, Omo and Carmen’s. It now has over 350 store locations across Australia, after starting over four decades ago.

    The discount ASX retail share is liked by a few different brokers including Morgans, which was impressed by the level of growth and level of costs.

    Morgans rates Reject Shop as a buy with a price target of $8.91.

    In the recent reporting season, Reject Shop said that underlying net profit after tax (NPAT) went up by 46.5% to $16.3 million. Underlying earnings before interest and tax (EBIT) grew 44.9% to $23.3 million and underlying EBITDA went up by 20.8% to $31.1 million.

    Whilst keeping in mind that the company expects to report a loss in the second half of the year, it continues to focus on fixing the business as part of the turnaround strategy.

    In the second half, the ASX share’s management will continue to focus on cost reduction, driven by business simplification and operational efficiency.

    Reject Shop CEO Andre Reich said:

    We believe the discount variety sector presents a significant opportunity for growth over the medium to long term. As Australia’s largest discount variety retailer, and with our strong balance sheet, The Reject Shop is well positioned to capture this opportunity.

    There is further work to be done to ‘fix’ The Reject Shop and, once the cost base is optimised, we expect to be well-placed to pursue longer-term growth via store network expansion and by growing our online presence.

    According to Morgans, the Reject Shop share price is trading at 27x FY21’s estimated earnings and 18x FY22’s estimated earnings.

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  • 3 exciting small cap ASX shares to watch

    ASX share price on watch represented by man looking through magnifying glass

    Because I’m a fan of small cap shares, I feel quite lucky to have a large number to choose from on the Australian share market.

    Three small cap ASX shares that stand out from the rest and could have bright futures are listed below. Here’s what you need to know about them:

    Bigtincan Holdings Ltd (ASX: BTH)

    Bigtincan is an artificial intelligence-powered sales enablement automation platform provider. Strong demand for its platform from some of the biggest companies in the world has underpinned solid growth in recent years. This has continued in FY 2021, with Bigtincan recently releasing a very strong half year result. The company reported annualised recurring revenue (ARR) of $48.4 million at the end of the half, which was a 50% increase over the prior corresponding period.

    Ord Minnett currently has a buy rating and $1.08 price target on its shares.

    Booktopia Group Ltd (ASX: BKG)

    Booktopia is an online book retailer which has also been growing at a rapid rate. Last month it released its half year results and revealed a 51.1% increase in revenue to $112.6 million and a 502.3% jump in underlying EBITDA to $8 million. This was driven by the shift to online shopping and its new distribution centre. The latter helped the company ship more units than ever before during the half.

    Morgans is a fan and has an add rating and $3.53 price target on Booktopia’s shares.

    Doctor Care Anywhere Ltd (ASX: DOC)

    A final small cap to watch is Doctor Care Anywhere. It is a growing UK-based telehealth company that is aiming to deliver high-quality, effective, and efficient care to its patients. Due partly to the pandemic accelerating the adoption of telehealth services, Doctor Care Anywhere is another company growing quickly. In January the company released its fourth quarter update and reported a 151% increase in revenue to 3.8 million pounds.

    Bell Potter is positive on its prospects. The broker has a buy rating and $1.95 price target on the company’s shares.

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    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. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Booktopia Group Limited and Doctor Care Anywhere Group PLC. The Motley Fool Australia has recommended BIGTINCAN FPO and Doctor Care Anywhere Group PLC. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

    The post 3 exciting small cap ASX shares to watch appeared first on The Motley Fool Australia.

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