Top 3 Small-Caps ASX Stocks To Invest In Right Now!
Our Active Trades Performance in September
-
Cyclopharm (ASX:CYC)
CYCMarch 31, 2023Up to $2.20$2.79$2.25$3.0070.1% -
Weebit Nano (ASX: WBT)
WBTMay 17, 2022Up to $5.00$3.15$3.50$9.5641.9%
-
Cyclopharm (ASX:CYC)
CYCMarch 31, 2023$2.7970.1% -
Weebit Nano (ASX: WBT)
WBTMay 17, 2022$3.1541.9%
Stocks Down Under’s Team Of Experts Has Put Together Our Top Small-Caps Shares Picks To Invest In Right Now!
Get our Industry Experts’ reports and recommendations, along with BUY and SELL Alerts for ASX-listed Stocks with Stocks Down Under’s Concierge. Sign up to see our trades.
Capitalizing on the Rewards
The potential rewards of investing in small cap stocks are big. Since they're at the early stages of their growth, they can deliver significant returns if their business plans succeed.
The potential rewards of investing in small cap stocks are big. Since they're at the early stages of their growth, they can deliver significant returns if their business plans succeed.
They are often under-researched compared to large cap stocks. This can create opportunities for savvy investors to uncover potential investment gems before the wider market.
They are often under-researched compared to large cap stocks. This can create opportunities for savvy investors to uncover potential investment gems before the wider market.
Small cap stocks tend to be under-owned by mutual funds, providing the potential for significant price appreciation as these stocks attract more attention.
Small cap stocks tend to be under-owned by mutual funds, providing the potential for significant price appreciation as these stocks attract more attention.
Get More detailed reports with Stocks Down Under’s Concierge!
Get 14 Days of the Concierge, with Stock Tips and Detailed Reports for free, no credit card necessary
Navigating ASX Small Caps: The Hidden Potential of Small Cap Stocks
In the world of investing, there's an undeniable allure to unearthing hidden gems. The ASX small-cap stocks, overlooked by many investors, often pack significant growth potential. As the saying goes, mighty oaks from little acorns grow. Small caps, short for small market capitalization companies, typically have a market cap between $300 million to $2 billion. Market capitalisation or 'market cap' is simply the total value of a company's outstanding shares on the market.
When compared to large-cap companies, which boast a market cap of $10 billion or more, the market capitalisation of small-cap companies might seem insignificant. Yet, these small-cap shares might just be hiding the potential for tremendous growth.
The Allure of Small-Cap Investing
The ASX Small Cap stocks, or more specifically, those listed on the S&P ASX Small Ordinaries Index, are perceived as higher risk investments compared to their large caps counterparts. The risk stems from these companies being in their early stages, with revenues not as robust as larger companies. However, the silver lining is that they often possess greater growth potential. The share price of small-cap stocks can be volatile, and investors need to do rigorous research and accept more risk. Yet, it's this volatility that offers opportunities for substantial returns. Despite the higher risk, the potential growth of the markets for these companies and their share prices often attract retail investors and even some bold institutional investors.
The Risks and Rewards of Small Cap Investing
While small cap stocks present attractive opportunities, it's vital to balance this with a deep understanding of the potential risks and rewards. Investing in these types of penny stocks, is not for the faint-hearted, and it's often likened to a roller-coaster ride due to the considerable volatility in share prices.
Understanding the Risks
The risks associated with investing in small cap stocks largely stem from their size. With limited resources compared to big companies, small cap companies are more vulnerable to economic downturns and changes in market conditions. There's also a higher chance of bankruptcy due to the lack of financial strength to weather difficult times.
Frequently Asked Questions
Small-cap companies typically have a market capitalization between $300 million to $2 billion. In contrast, large-cap companies have a market cap of $10 billion or more.
Our Top 3 ASX Small Caps Stocks
Core Lithium (ASX: CXO)
Core Lithium, an Australian company based in Western Australia, focuses on mining lithium, a critical component for electric vehicles and renewable energy storage. With their Tonopah Lithium Project in Nevada, USA, they have a potential growth catalyst as the demand for electric vehicles soars. The company has been posting record revenues, with a recent increase in revenue growth by 20% in the first half of the current financial year..
City Chic Collective (ASX: CCX)
City Chic, an ASX retailer specialising in plus-size fashion, has been a standout among small cap shares on the ASX. Expanding its reach through online channels, the company has been posting record revenues, with a significant 30% increase in the past year. Despite the pandemic's challenges, City Chic's share price has remained resilient and grown consistently.
Nitro Software (ASX: NTO)
Nitro Software, an Australian tech company, is gaining momentum in the ASX small-cap scene. Nitro has seen a surge in demand from businesses, government agencies, and even individual users during the work-from-home era. Revenue growth has been impressive, with a record increase of 40% in the first half of the current financial year. The company's share price has appreciated by more than 60% over the past year.
Our Blogs on Small Caps Stocks
Why do ASX penny stocks have such an awkward reputation?
Penny stocks, especially ASX penny stocks, have a bad reputation in the investing world. They are associated with high risk and…
ASX Gold Small Caps: Here are our 3 favourite in 2023
There are plenty of ASX gold small caps, but which ones are the best? We’ve selected our favourite 3, all…
ASX pharmaceuticals: Now that Blackmores is being acquired, here are 2 other stocks for investors to consider
Most ASX pharmaceuticals are small caps that are working on a medical treatment that they hope to bring to market.…
Annual Recurring Revenue: Is it a useful metric or lipstick on a pig?
Annual Recurring Revenue (ARR), sometimes called Annualised Recurring Revenue, is a metric you’ll hear some ASX small caps use. What…
eGaming stocks are booming, so which ones should investors look at in 2023?
eGaming stocks haven’t performed well in recent years even as the global gaming industry has grown exponentially. The global gaming…
We know it’s not very woke, but we still like oil and gas
Stuart Roberts from Stocks Down Under says he isn’t popular at cocktail parties, being a fan of oil. He sees…
