Insights

2 exciting small cap shares tipped as buys

These small cap shares could be worth watching…
The post 2 exciting small cap shares tipped as buys appeared first on The Motley Fool Australia. –

The small side of the Australian share market carries significantly more investment risk than other areas.

However, if your risk tolerance allows for it, having a bit of exposure to this side of the market could be a good thing for a balanced portfolio. This is due to the potential returns on offer if you can find a star of the future in its early days.

With that in mind, here are two small cap ASX shares that could be worth watching closely:

Adore Beauty Group Limited (ASX: ABY)

The first small cap to watch is Australia’s leading online beauty retailer.

Adore Beauty has been growing strongly over the last few years and continued this positive form in FY 2021. For the 12 months ended 30 June, the company reported a 48% increase in revenue to $179.3 million and a 53% jump in EBITDA to $7.6 million. This was driven by increased repeat sales and a 39% lift in active customers to 818,000.

Positively, the company still has a long runway for growth in the future. Management notes that the beauty and personal care (BPC) market in Australia is worth $11.2 billion and is expected to grow at a 26% CAGR through to 2024. Furthermore, online sales comprise just 11.4% of the BPC market at present but are expected to grow significantly as more sales shift online.

Earlier this month the team at Morgan Stanley put an overweight rating and $6.00 price target on the company’s shares.

Clarity Pharmaceuticals Ltd (ASX: CU6)

Another small cap ASX share to look at is Clarity Pharmaceuticals. It is a newly listed clinical stage radiopharmaceutical company. Clarity specialising in targeted copper theranostics, for the diagnosis and treatment of cancers.

The team at Bell Potter note that this type of molecular targeted radiation offers significant advantages to traditional oncology tools. These include radiotherapy, chemotherapy, and has synergistic impacts with hormone therapy, and immunotherapies.

It also notes that Clarity’s unique platform is based on copper radionuclides. It feels this may offer advantages compared to other frequently used radionuclides.

The broker currently has a speculative buy rating and $1.77 price target on its shares. Though, Bell Potter believes a fully de-risked pipeline would make its shares worth $3.75.

The post 2 exciting small cap shares tipped as buys appeared first on The Motley Fool Australia.

Wondering where you should 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 could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

2 beauty ASX shares delivering attractive growth

3 stellar small cap ASX shares for your watchlist this month

2 excellent ASX tech shares rated as buys

3 growing small cap ASX shares named as buys

Top brokers name 3 ASX small cap shares to buy

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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!