Looking for exposure to the small side of the market? Check out these shares…
The post 3 small cap ASX shares for your watchlist appeared first on The Motley Fool Australia. –
As I’m a fan of small cap shares, I feel quite fortunate to have a large number to choose from on the Australian share market.
Three small cap ASX shares that could have bright futures are listed below. Here’s why they could be worth watching:
Damstra Holdings Ltd (ASX: DTC)
The first small cap to watch is Damstra. It is an integrated workplace management solutions provider. Its cloud-based workplace management platform is used by businesses to track and keep their employees safe.
Damstra has been a positive performer over the last couple of years and has built on this in FY 2021. For example, during the first half of FY 2021, the company posted a 29.6% increase in revenue to $13.3 million. The good news is that this is still only a fraction of its total addressable market, which is expected to be worth US$20 billion by 2022.
SILK Laser Australia Limited (ASX: SLA)
Another small cap ASX share to watch closely is SILK Laser. It is a laser, skin care, and cosmetic injections company which has been growing strongly in FY 2021. For example, during the first half, SILK reported a 62% increase in network sales to $44.9 million and a 305% increase in net profit to $4.7 million.
Thanks to growing demand and store network expansion, SILK appears well-positioned to continue its growth over the next decade. In respect to the latter, at present SILK has a total of 60 clinics in operation. However, management intends to grow its network by 6 to 10 new clinics per annum up to a target of approximately 150 clinics.
Universal Store Holdings Limited (ASX: UNI)
A final small cap to watch is Universal Store. It is a fashion retailer aiming to deliver a frequently changing and carefully curated selection of on-trend products to the fashion focused customer. This focus is clearly paying off, with Universal Store a particularly positive performer this year. It delivered a 23.3% increase in first half sales to $118 million and a 63.6% increase in underlying net profit after tax to $21.1 million.
Looking ahead, the company has opportunities to expand its footprint materially over the next decade to drive further growth. Management has identified up to 60 new store sites, this is almost double the 65 stores it was operating from during the first half.
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James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Damstra Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Damstra Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.