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3 small cap ASX shares investors should watch very closely

Check out these small cap ASX shares…
The post 3 small cap ASX shares investors should watch very closely appeared first on The Motley Fool Australia. –

The small end of the Australian share market is home to a number of companies with the potential to grow strongly in the future.

Three small caps that investors may want to get better acquainted with are listed below. Here’s why they should be on your watchlist:

Booktopia Group Ltd (ASX: BKG)

The first small cap ASX share to watch is Booktopia. It is an online book retailer which has been growing at a rapid rate in FY 2021. For example, during the first half Booktopia delivered a 51.1% increase in revenue to $112.6 million and a massive 502.3% jump in underlying EBITDA to $8 million. Pleasingly, its strong sales growth has continued since the end of the first half. The company’s revenue increased 53% during the third quarter. Management advised that this strong growth is being driven its new distribution centre, which is allowing it to capitalise on the shift to online shopping.

Damstra Holdings Ltd (ASX: DTC)

Another small cap ASX share to watch is Damstra. This integrated workplace management solutions provider’s cloud-based workplace management platform is used by businesses globally to track, manage, and protect their workers and assets. Damstra has been a growing its top line at a solid rate in recent years and has continued this positive form in FY 2021. During the first half, the company reported a 29.6% increase in revenue to $13.3 million. Even when annualised, this is still only a fraction of a total addressable market (TAM). Management expects its TAM to be worth US$20 billion by 2022.

IntelliHR Ltd (ASX: IHR)

A final small cap ASX share to watch is IntelliHR. It is a cloud-based human resources and people management platform provider. IntelliHR has been growing its subscribers and annual recurring revenue (ARR) strongly over the last couple of years. This is being driven by the shift to the cloud and its international expansion. Looking ahead, management sees continued revenue growth in new and existing markets and further investment in both R&D and sales and marketing resources. The latter is to capitalise on a large and fast-growing global market.

The post 3 small cap ASX shares investors should watch very closely appeared first on The Motley Fool Australia.

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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 Damstra Holdings Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Booktopia Group Limited. 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.

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