Top 3 Small-Cap Stocks to Watch and Invest in for 2024 - Expert Picks
Richard Hemming
Welcome to our Stocks & Beers With Rich. It’s been a big week with lots of stock market news! I caught up with Tom Piotrowski at CommSec and we went through six small cap stocks that we like, three of which I’ll go to share with you today. We did our "Ask the Analyst" webinar for members, which received a great response. Ask the Analyst is available on our website for members who want to catch up. We answered loads of questions on commodities like lithium, copper and uranium. We gave our thoughts on shares we cover as well as some we don’t. Now to our top 3 Small-Cap Stocks for March 2024.
Best Small-Cap Stocks to buy in March 2024
Macquarie Technology (ASX:MAQ)
One of the ASX Shares I talked about on CommSec was Macquarie Technology (ASX:MAQ) which Small Cap members will know that I have support for a long time. Certainly, I’ve known the Tudehope brothers and founders for many years. This week I also caught up with David Tudehope, who’s the CEO and with the CFO Helen Cox. David said that our support for the stock a number of years ago when it's share price was trading at around $8 was a big deal. Many turned away, you turned in. It was on our top small-cap stocks to buy. Now it’s share price is about $80! With a market cap of 1.92billion it shows how small industrials can seriously outperform.
What I love about MAQ is how it has surfed the themes of cloud computing and cyber security. The big deal now is how this is being super charged by AI, which I spent a lot of time talking to David and Helen about.
Super charging with AI
Many companies claim AI credentials and I must say that in the vast majority of cases, I’m not sure that this is reality. What is interesting is how MAQ’s new data centre, IC3 Super West, is going to be AI-focused when it commences in late 2026.
This gives MAQ a big competitive edge, if they can nail the hyperscalers as tenants. What’s different is the energy or power is at another level, which means you can’t simply air cool it, the servers need to be liquid cooled.
PlaySide Studios (ASX: PLY)
Another stock is PlaySide Studios (PLY), which produces computer games on its own platforms, which include Dumb Ways to Die. These games are powered by data processing units, or DPUs which are more powerful than your traditional CPUs. This what is powering AI and why they run so hot. The computing power needs to be instantaneous, not delayed by even a millisecond. When you watch these gamers, you know what I’m talking about.
No doubt PlaySide will have a section in Macquarie’s new data centre.
Retail Food Group (RFG)
A third stock I mentioned is one I’ve been buying recently and is outside of technology space, Retail Food Group (RFG). If you don’t know, RFG is a franchisor, whose brands include Gloria Jeans Coffees, Donut King, Michelle’s Patisserie.
What we like about RFG is that it’s been recapitalised over time after a near death experience and it’s got a capital light business model. One of the ways you make money from shares is by a high return on equity being compounded by reinvestment.
This week's beer!
That’s my week! Now for the beer. Beneficial Beer Co’s Wagon Drivers Pale Ale. Comes straight from where we used to be based, in Holt Street, Surrey Hills.
Next Up In Investing
ASX Shares are an exciting space to invest in and there is always more to look out for.
Next week we have a bonus ASX Dividend Report out for our Blue Chip Value Members who are focussed on large-cap stocks and ETFs.
It's also a big week for Small Caps with more stock updates and buy, sell and holds.
CommSec Interview with 6 Small Caps
Find out more about the 6 stocks with growth potential I talked about at Commsec and watch my conversation with Tom Piotrowski here:
https://www.commsec.com.au/market-news/executive-series/2024/mar-under-the-radar-report.html
A strong them has been takeover acquisition with 1 in 5 of our shares being taken over.
More on Small Cap Shares
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