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Small Cap Investing

Small Companies. Big Opportunities

Stock market goes up 7 out of 10 years.

You need to beat the market

The share market average return is 10.5% a year.

  • The share market tends to rise more than it falls as seen in this 20 year chart.
  • To generate the sort of wealth to fund your retirement means you need to do better than average:
  • with Small Caps you can hit the ball out of the park and boost your returns.
Small Cap research
ASX 200 Charts 4 March 2025

With small caps there is information risk. Historic earnings performance shows little resemblance to their future earnings.

Richard Hemming_w
Richard Hemming
Editor

Small Caps: Fast Growth

Companies only grow when profits are reinvested

Small companies only grow when profits are reinvested, and when a company’s sole objective is to maintain a high dividend yield, it doesn’t augur well for long-term value.

Compare Telstra’s return with the gold producer, Newcrest Mining. The miner delivered an average annual dividend yield of 0.78 per cent between 2000 and 2012 with the annual dividend increasing from 5 cents in 2000 to 35 cents in 2012.

An investor that bought Newcrest in 2000 would have achieved a total return of 406 per cent in 2012, comprising a 363 per cent price return and a 43 per cent dividend return

Our track record

Asset prices have more than doubled in the past seven to ten years, while income levels have barely moved. People are going up the risk curve to get more bang for their buck.

Richard Hemming_w
Richard Hemming
Editor

Top 10 Stocks by Performance

How we pick stocks?

Genuine Growth

Small companies growing fast. Often these are stocks you need to grab onto even though they might look expensive. More often than not they have a great business model involving little capital investment to fund fast sales growth. $SRX, $IPD

Ex Big Caps

An opportunistic category. Big companies can have cyclical earnings and low profit margins. They may have been hit by a broader market decline or  a difficult division or a change in their business model. 

Value Industries

Often Small Cap industrial companies have cyclical earnings but they have more resilience than the market gives them credit for. Sometimes they even have a strong balance sheet. You hope that they have a defendable niche. $NCK$, FNP.

Secret Santa

For some reason the true value of these companies is hidden by loss making assets or assets which are equity accounted. $MAQ was like this when we first recommended it at $8.15. $APN.

The companies we advocate buying are not covered anywhere else. Fund managers can’t buy them because they are too small. They can’t get a meaningful stake. Individuals have the advantage.

Richard Hemming_w
Richard Hemming
Editor

ASX Sectors where Small Companies outperform

Quality Australian companies outperforming on the world stage.

1 in 5 of our small companies are taken over. Why? Because they are quality small companies, growing fast and outperforming in a niche environment.

We have many examples of this. Think Afterpay first tipped at $2.15. But in 2024, $SLH, $QHL.

Our analyst team provide in-depth special reports on our favourite stocks in growth sectors.

Our best performing stocks

Invest in High-Growth ASX Small Caps

Ready to grow a strong portfolio with fast-growing stocks?

Accelerate with ASX Small Caps. With over 2,000 stocks to choose from, let us do the hard work for you. With our research, turn $1,000 into ….

Access Small Cap research now

Turn
$1000
Into:

Small Cap
Tip
Price
Market 
Price
Return
%
Afterpay (APT)
$2.51
$2.51
1.1%
$1,000
Paladin Energy (PDN)
$0.42
$0.42
1.1%
$1,000
Northern Star (NST)
$0.83
$0.83
1.1%
$1,000
Nick Scali (NCK)
$1.40
$1.40
1.1%
$1,000
Macquarie Telecom (MAQ)
$8.15
$8.15
1.1%
$1,000
Pilbara Minerals (PLS)
$0.32
$0.32
1.1%
$1,000

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