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15 ASX Small Caps to get your returns motoring

Our analysts are seeing ASX Small Cap stocks being bid up like never before.

This month a small ASX listed software company IntelliHR was taken over at a 300% premium to the initial offer price, possibly an ASX stock market record.

In our Small Cap companies report number 550, released this week, our analysts cover ASX small caps that started with a market capitalisation of under $500m. These small cap stocks aren't small now.

Gentrack (ASX:GTK): The software company

  • It's share price rocketed 30% higher on Monday on its third upgrade in three months. Gentrack is a small cap stock that has returned 208% since we first hand picked it less than 12 months ago.

Gentrack ASX GTK has returned 208% in less than 12 mths

Austal (ASX:ASB): The shipbuilding company

  • It's share price spiked 27% on Friday on a US$3.2bn (A$4.8bn) deal with the US Navy.

Austal ASX ASX share priced spiked 27%

Comet Ridge (ASX:COI): Is soon to be a gas producer

  • Comet Ridge rebounded 33%, partly on news of a deal with ASX listed explosives giant Orica.

Comet Ridge ASX COI is on track to start producing gas

Not all the the small cap stocks we cover are trading as good news stories, but if we get over 50% of our calls right, there is big money to be made. Our average over the past 12-years is 7 out of 10 stocks trading up from where we first recommended them. Why is there big money to be made? Because we get in on the early stages and there are no limits to how high a stock can go, while your losses are limited to what you put in (if you don’t borrow).

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Value Stock list with our Best Stocks to Buy list

Also, right now, the odds are in our favour. Small Caps, which we define as less than $500m in market cap, is where the value is, both in terms of below average price earnings multiples and in terms of prospective growth.

Private equity predators are paid to hunt for companies. There is much more value in the listed space than in trawling through a private company. This factor alone puts a floor under valuations, as long as a company doesn’t take on too much debt.

15 small cap stocks in this week's report!

Matthew Kidman Fund Manager: Now's the time to invest

Don’t believe us? We interview 25 year market veteran and fund manager Matthew Kidman to celebrate our 550 specialist reports. he author of Bulls, Bears & a Croupier is a
bull. Matthew Kidman has been running his fund for almost 9 years and has returned almost 16% a year versus the S&P/ASX 200 Index’s 9%. He tells Under the Radar Report about his secret sauce and why now is a good time to invest in Small Caps.

Kidman is adamant that when you have a soft economy, you need to be investing in Small Cap stocks.

This is simply because the price of stocks is based on assumptions further out in the future than for any other asset class.

To see the full interview with Matthew Kidman, click here.

Under the Radar Report is about positioning your portfolio today so that you can live comfortably tomorrow. The growth you can access in Small Caps is unavailable anywhere else.

For the latest video on the ASX lithium stocks and lithium projects

ABOUT THE AUTHOR

Richard Hemming

Richard Hemming

Follow Richard on linkedin

Richard is a leading market commentator and expert on ASX Small Caps

www.undertheradarreport.com.au provides investment opportunities in Small Caps that you won’t get anywhere else.

Under the Radar Report is licensed to give general financial advice only (ASFL: 409518). The author does not own shares in any of the stocks mentioned.

Under the Radar Report is licensed to give general financial advice only (ASFL: 409518). The author does not own shares in any of the stocks mentioned.

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