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Small Cap Stocks to Light Up Your ASX Stock Portfolio (with Case Study MAQ)

Small Cap Stocks are the little companies on the ASX that can really light up your ASX stock portfolio. They operate in diverse sectors of the economy and are often unknown and not covered by the big fund managers or brokers which is where you have an advantage.

How do you find small cap stocks to invest in?

Our team of analyst’s sole job is to pick and analyse small cap stocks. They do the hard work of fundamental research for you. We are value investors and trawl for undervalued ‘growth’ small cap stocks. But growth stocks that clearly offer longer-term upsides. Over 50% of the small cap stocks that we recommend give dividends. The ASX is crammed with over 2,000 small cap stocks and the hard part is finding the diamonds.

Do you get all your small cap stock recommendations right?

I wish we could say that we get all our recommendations right. We watch the small cap stocks closely and update when we believe a stock is turning. If a stock has gone down, sometimes it just needs patience, sometimes we do sell out.

Macquarie Corporate Telecommunications (MAQ)

I love the story of MCT. We first tipped it in October 2011 when it was $8.15, it dropped to $7, came back to $8, dropped to $7, then down to $5 for about a year. It went back to $6 and we put it on a Buy again. We believed in the company and told our subscribers to keep holding. A lot at this stage had on paper lost a lot of money. We kept believing.

By September 2017 the company’s hard work and vision was paying off and we put a Take Profits at $14.60. In August 2018 it was at $23 and our current recommendation in June 2019 is Buy.

A graph showing the Macquarie share price from 2011 to 2019

Success for small cap stocks isn’t always a straight road ahead

It shows that when you are investing patience is required and that sometimes a small cap stock is re-rated by the market because for example the sales are not coming as fast as they thought or some unforeseen event happens. Often it is not a straight road but small caps stocks really can deliver some great returns for your share portfolio.

Top 10 Small Cap Stocks winners and Losers

Click through to our small cap stock performance page to see our biggest small cap stock winners and losers. Although some of our biggest losers have lost big time, the rewards for the small cap stocks that outperform, do so to a much greater degree. Diversification is so important for any share portfolio and at Under the Radar we cover over 100 small cap stocks so there is something for everyone.

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