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3 small cap ASX shares worth watching closely

Check out these small cap ASX shares…
The post 3 small cap ASX shares worth watching 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:

Audinate Group Limited (ASX: AD8)

The first small cap ASX share to look at is Audinate. It is a leading digital audio-visual networking technologies provider. Audinate is best known for its world class Dante audio over IP networking solution. Management notes that Dante is the evolution of AV systems. It is converging all previous connection types into one to deliver vastly superior performance while making these systems easier to use, easier to expand, and less expensive to deploy. The number of Dante enabled products manufactured by its customers is now eight times greater than its nearest rival. This makes it the clear industry leader.

Booktopia Group Ltd (ASX: BKG)

The second 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)

A final small cap 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.

The post 3 small cap ASX shares worth watching 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 AUDINATEGL FPO and 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 AUDINATEGL FPO and 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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