2 exciting small cap ASX shares to watch closely in 2021

It will be worth watching Mach7 Technologies Ltd (ASX:M7T) and this ASX small cap share closely in 2021. Here’s why…
The post 2 exciting small cap ASX shares to watch closely in 2021 appeared first on The Motley Fool Australia. –

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Are you looking to add a little exposure to the small cap side of the market to your portfolio? If you are, then you might want to take a look at the shares listed below.

Here’s why these shares have been tipped for big things in the future:

Mach7 Technologies Ltd (ASX: M7T)

Mach7 is a growing developer of enterprise imaging and informatics solutions for image viewing, storage, and workflow management. Its solutions can be implemented individually or as a comprehensive end-to-end image management and diagnostic viewing platform.

Demand has been strong for its offering, leading to some major contract wins this year. One was a seven-year deal with Trinity Health for the license and associated support services for its eUnity enterprise viewer. Trinity Health is the fifth largest healthcare Integrated Delivery Network (IDN) in the United States and will be installing it across multiple facilities within its 92 hospitals.

Pleasingly, this could be the first of many new contracts. Management revealed that its pipeline is very strong in respect to late-stage deals, which it feels is alluding to a strong second half of FY 2021.

Analysts at Morgans are positive on the company’s prospects. Earlier this month the broker put an add rating and $1.49 price target on its shares. This compares to the current Mach7 share price of $1.19. Limited (ASX: MYD) is an online retail marketplace that has a focus on furniture, homewares, appliances, technology, baby products, and hardware. It has been a very strong performer this year. During the first quarter of FY 2021, the company delivered gross sales growth of 317% to $56.67 million. This was driven by the accelerating shift to online shopping and a 268% increase in active customers to 669,897 compared to the prior corresponding period.

Pleasingly, this strong form has continued since then. MyDeal recently released an update on its performance during Black Friday and Cyber Monday. It performed strongly during the promotional period, leading to a record month of trade in November. MyDeal recorded gross sales of $30 million, up 192% year on year and 63% month on month. Its active customers grew to a record 778,867, up 236% year on year.

Morgans is also positive on its prospects. Its analysts recently put an add rating and $1.70 price target on its shares. This compares favourably to the current MyDeal share price of $1.21.

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James Mickleboro 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 MACH7 FPO. The Motley Fool Australia has recommended MACH7 FPO. 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 watch closely in 2021 appeared first on The Motley Fool Australia.

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