Keep an eye on these small cap shares…
The post 3 growing small cap ASX shares to watch appeared first on The Motley Fool Australia. –
If you’re wanting to invest in the small side of the Australian share market, then the three small caps listed below could be worth a closer look.
While there is certainly still a lot of work to be done, they could have very bright futures ahead of them. Here’s why they could be worth adding to your watchlist:
Alcidion Group Ltd (ASX: ALC)
The first small cap share to watch is this informatics solutions company. It is aiming to transform healthcare with proactive, smart, intuitive technology solutions that improve the efficiency and quality of patient care in healthcare organisations, worldwide. Alcidion appears well-positioned for growth thanks to the shift to a paperless environment in the healthcare sector and other favourable industry tailwinds.
Over The Wire Holdings Ltd (ASX: OTW)
Another small cap to watch is Over The Wire. It is a telecommunications, cloud, and IT solutions provider which has been growing at a solid rate in recent years. Positively, this has continued in FY 2021, with the company reporting a 17% increase in revenue to $50.3 million and a 28% jump in EBITDA to $10.5 million. Positively, almost all its revenue is now recurring, with recurring revenue growing 25% to $45.9 million. And while a recent update reveals that a major new contract is expected to close in FY 2022 instead of FY 2021, management is still forecasting half on half recurring revenue growth of 7% in the second half.
Volpara Health Technologies Ltd (ASX: VHT)
A final small cap to watch is Volpara. It is a healthcare technology company that uses artificial intelligence to assist with the early detection of breast cancer. Demand for its software has been growing strongly in recent years, leading to impressive market share gains in the United States. This has underpinned solid recurring revenue growth. However, despite this, Volpara still has a significant runway for growth in the future. It estimates that it has a US$750 million annual recurring revenues (ARR) opportunity in breast cancer screening alone. This compares to its current ARR of ~US$18.6 million.
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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. owns shares of and has recommended Alcidion Group Ltd, Over The Wire Holdings Ltd, and VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended Alcidion Group Ltd and Over The Wire Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.