Under the Radar Report

Why Invest in ASX Small Caps?

ASX Small Caps give you growth. This is what ASX Small Caps and Under the Radar Report is all about.

As a small company grows, so does your wealth

It's much easier for an ASX listed small company to double or triple in size than for a big ASX Blue Chip stock to grow by 5 or 10%. ASX Small Caps give you share price growth. This is what ASX Small Caps and Under the Radar Report is all about.

Smaller companies

ASX Small Caps are smaller companies listed on the ASX

Niche industries

They often operate in niche industries

Fast growth

Often they are growing fast

Quality companies

When you buy ASX Small Caps before the big market players know about them you can watch your wealth grow.

Diverse industries

Our Small Caps operate in all industries from big shipping manufacturers to renewal energy producers, biotechs, miners, industrials and food producers.

We do all the research so you don't have to

At Under the Radar Report, we provide you with independent, institutional grade Small Caps research, and show you exactly how to structure a portfolio. We help you choose Small Caps for your portfolio and we are delivering strong returns for our subscribers.

We recommend structuring your ASX share portfolio clearly and that up to 25% of your portfolio should be invested across 7-15 ASX Small Caps to diversify your portfolio and position it for growth. Our weekly Small Cap stock report provides you with ongoing updates advising you when to Buy, Hold and Sell.

Why do you need ASX Small Cap research?

What you see with ASX Small Caps, is “information risk”. The companies are too small for the big brokers to invest in so there is not the research around. Also, with these ASX Small Caps, the company's historic earnings performance can often bear little resemblance to their future earnings and so you need quality research before you invest in them.

Why invest in Small Caps?

Investing is about making money and small caps need to be a component of every investors' portfolio:

1. A lack of information

The Australian small cap market is notoriously inefficient. Unlike bigger companies, few, if any analysts' forecasts exist for its revenues and profits. There is also little idea of whether or not the company will need to come to investors for capital.

2. Opportunities to make money

Precisely because of these inefficiencies, the only area where fundies outperform the market is in the small cap arena, according to ratings agency Standard & Poors.

3. Retirement preparation

Small caps offer an essential avenue for retirement preparation, because they can generate capital growth for investors. This is because small companies offer leverage – both operationally and financially. Leverage means you are much more likely to double in size if your market cap is $100 million, than if it is $1 billion.

4. Diversification

Small companies provide diversification from how the economy performs. A small company's earnings growth is based more on increasing its market share, than on how the general economy performs. It is coming from a very low base, so if you believe in the story, there is every chance it will achieve just this.


5. Growth

A small company can grow its earnings by increasing its market share from 1 per cent to 5 per cent. A large company with market share of 50 per cent will be basically defending its position.


6. Variety

Small cap ASX listed companies provide the only opportunity for investment in businesses that have management that are both entrepreneurial and experienced, to varying degrees. The exciting part of being invested in this sector is watching businesses grow.


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ASX Small Caps versus Blue Chip Stocks

Blue Chip stocks like the banks, Telstra and other internet companies pre Covid-19 were trading at record high levels. Subsequently monetary stimulus has encouraged buying in many, which has lifted global indexes to within spitting distance of the previous levels. Investors are confident that their earnings will appreciate, delivering growing dividend income. However, these companies have high “price risk”.

If there is any softening of their earnings growth, which is inevitable in the new environment where there is much less certainty about the future, their share prices are extremely vulnerable to another wave of sustained selling.

Our Performance

ASX Small Caps offer investors share price growth. Under the Radar Report's annualised average return on all our 100+ ASX Small Caps is over 50% and this includes some real duds, but it also includes ASX Small Caps like Sirtex Medical or Select Harvests that have tripled in value and more. Plus over 50% of the ASX Small Caps we recommend pay dividends. At Under the Radar Report, we look for value, which means a ASX Small Cap that is covering its costs but has an option on greatness. You can’t find these types of investments anywhere else. Since 2011 we have been delivering quality independent ASX Small Cap stock advice. Click through to view our best performing Small Caps.

Learn more

ASX Small Caps give you growth and dividends:

Individuals invest in ASX Small Caps for growth but also dividends. Over 50% of the ASX Small Caps that Under the Radar Report recommends pay dividends. We give you quality research on ASX Small Caps you won't find anywhere else.

Case Study: What ASX Small Caps can do for your Portfolio

Our editors family invested $70,000 into a ASX Small Cap silver and gold miner Bolnisi Gold with operations in Mexico. They invested at 9 cents and below between December 1996 and October 2003. Less than four years later the ASX Small Cap company merged with Coeur d’Alene Mines and is now the world’s largest listed primary silver producer. Its stock rose to $3.27 by June 2007, making their family $1.5m.

ASX Small Caps really can grow a portfolio as seen here with Bolnisi Gold. ASX Small Caps can be at the risky end of the investment spectrum which is why you need to undertake thorough analysis of their sustainable earnings and balance sheets. This is where Under the Radar Report comes in.

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