Hidden gems outside the ASX 200: 4 small caps with growing revenue and no debt

Résumé détaillé

These fast-growing companies might be worth a look. The post Hidden gems outside the ASX 200: 4 small caps with growing revenue and no debt appeared first on The Motley Fool…

Occasionally running the ruler over some of the smaller companies listed on the ASX is a good idea to ensure you're not missing out on good opportunities.

I'm a fan of small to medium sized companies, with a strong preference towards those with growing revenue, rather than pre-revenue companies looking to launch a product or service.

There are plenty of reasons to look outside the S&P/ASX 200 Index (ASX: XJO) for value, and the first one is the potential for high returns.

Smaller stocks are sometimes overlooked by brokers or fund managers, and in many cases fund managers are limited by their mandates as to what they can actually invest in.

While this is as much an argument as to why small caps can be undervalued and perhaps should be avoided, when they do catch the eye of market watchers, they can rerate quite handily.

Smaller companies also have the ability to scale quickly in niche areas which might be overlooked by, or be too small for, larger companies.

There's also the opportunity for takeovers, with smaller companies naturally easier to absorb.

Investing in smaller companies is obviously not a fool proof investing theory – those don't exist.

To prove that point, the S&P/ASX Small Ordinaries Index (ASX: XSO) is down 11.09% over the past 12 months compared with a 2.27% rise for the ASX 200 over the same period.

Début de l'article, extrait de The Motley Fool Australia. Pour lire la suite, ouvrez l'article chez le média.