Insights

2 exciting small cap ASX shares to buy

There are some small cap ASX shares that could be able to deliver good returns over the coming years. One idea is City Chic Collective Ltd (ASX:CCX).
The post 2 exciting small cap ASX shares to buy appeared first on The Motley Fool Australia. –

man standing with arms crossed in front of giant shadow of body builder representing asx small cap stocks

Some small cap ASX shares may be able to make good returns over the longer-term.

There are smaller businesses that have interesting characteristics, which may be of interest to some investors:

Volpara Health Technologies Ltd (ASX: VHT)

Volpara is a medical technology business. Its main service is providing software to help detect breast cancer early on by increasing the quality of screening using AI.

The small cap ASX share reported its FY21 half-year result a couple of months ago. Subscription revenue went up 71% to NZ$8.8 million, though total revenue only grew by 38% to NZ$9.5 million. Annual recurring revenue (ARR) went up from NZ$18 million to NZ$19.9 million.

One of the metrics that Volpara likes to boast about to investors is that the gross profit margin reached 92%, up from 89% in the prior corresponding period.

The company recently won two contracts. The first was a five-year software as a service (SaaS) contract with BreastScreen Queensland to use VolparaEnterprise, which could expand to include VolparaDensity and VolparaLive. 

Volpara also announced that its breast health platform has been selected by US Radiology Specialists, which comprises of more than 280 radiologists, 3,100 team members and 145 outpatient imaging centres across 14 states in the US.

City Chic Collective Ltd (ASX: CCX)

City Chic is one of the small cap ASX shares in the retail space that is growing online sales at a fast rate. In FY20 online sales rose by 113.5% and this represented 65% of City Chic of total sales. Fund manager Chris Prunty from QVG Capital thinks that the e-commerce theme will continue to grow after COVID-19 has passed.

The company is made up of a variety of different retail brands. It sells plus-size clothing, footwear and accessories to women. It has a number of brands including City Chic, Avenue, CCX, Hips & Curves and Fox & Royal. City Chic has around 100 stores across Australia and New Zealand. It has websites for local and US customers, it has marketplace and wholesale partnerships with major US retailers such as Macys and Nordstrom, and a wholesale business with European and UK partners such as ASOS and Zalando.

City Chic recently acquired Evans for $41 million from Arcadia Group, which has gone into administration. Evans is a UK-based retailer of women’s plus-size clothing with a longstanding customer base and sizeable market position.

The Evans website made £23 million of sales with 19 million visits for the financial year to August 2020. The wholesale business also made £3 million of sales. The overall Evans group of businesses, including the stores and franchise, made £60 million of annual sales before COVID-19 came along. The small cap ASX share’s management are hoping it can capture some of the physical sales that Evans used to make. 

According to Commsec, the City Chic share price is valued at 23x FY23’s estimated earnings.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Tristan Harrison 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 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.

The post 2 exciting small cap ASX shares to buy appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!