Picking the winners in the small caps market can be tough, but you could do worse than look at these three sectors for growth.
Plenty of companies on the market offer promise, but don’t offer the potential to become the multi-baggers small cap investors hope for when they pile their money into the smaller end of the market.
Sometimes, it’s just a matter of good timing and luck.
For example, if you invested in miners Northern Star Resources (ASX:NST) you would have waited a while for its growth curve to play out.
It went from 2 cents to a whopping $9.34, but it took 10 years to get there.
But for those looking for bigger gains in a shorter time-frame, Star Investing has identified the top 15 risers this year (at the time of writing) — and found they come from three core sectors.
Health and tech
These tech and health care stocks have found increased customer numbers, proof their product works or both.
They also have commercial partners to make their plans a reality.
The biggest gaining stock, Avita Medical (ASX: AVH), is one of several stem cell plays on the ASX. Companies such as Avita uses stem cell therapy to treat various ailments from diabetes to arthritis. Avita’s target is burn injuries and wound care.
This year Avita has continued to have its product validated by research and have began to distribute its products, particularly in Japan through local partner, COSMOTEC as well as in America. As a result it’s up nearly 500 per cent this year.
In stark contrast, fellow wound-care stock Factor Therapeutics (ASX: FTT) collapsed last year after it found its methods did not work.
Another riser was, Orthocell (ASX: OCC) which spiked after a positive Phase II clinical trial result for its collagen scaffold technology. Essentially it helped the majority of patients with damaged nerves regain sensation.
Another gainer was family app Tinybeans (ASX: TNY). After several months of losing money, it’s approaching break-even point as it announced marketing deals with Lego and an unnamed US life insurer.
All 700 mining stocks on the ASX are hoping to come across the next big deposit that will send their competitors, offtake partners and potential acquirers flocking to their door step.
It’s fair to say only the big mining companies (such as BHP, Fortescue and Rio Tinto) are in that position.
But the miners on this list look like they are well on their way.
Lithium miner Liontown Resources (ASX: LTR) have recorded outstanding drilling results at its West Australian lithium project. West Australian gold miner Spectrum Metals (ASX: SPX) has had success as well.
Sometimes, mere hype can be enough to send a stock up.
Chile-focused miner Hot Chili (ASX: HCH) began the year signing an MOU to potentially acquire a copper-gold discovery that is historically significant.
It took up the right and has been drilling since. While no results had been announced, investors have clearly been excited about the project.
|Total Return YTD (%)||Market Cap|
|AVH||AVITA MEDICAL LTD||0.49||493||$913.6M|
|R3D||R3D GLOBAL LTD||0.04||471||$1.6M|
|ANO||ADVANCE NANOTEK LTD||3.7||445||$273.2M|
|ATU||ATRUM COAL LTD||0.345||324||$164.0M|
|TNY||TINYBEANS GROUP PTY LTD||1.4||322||$46.3M|
|LTR||LIONTOWN RESOURCES LTD||0.084||295||$128.4M|
|HCH||HOT CHILI LTD||0.032||282||$35.6M|
|SPX||SPECTRUM METALS LTD||0.019||280||$24.0M|
|FTC||FINTECH CHAIN LTD||0.18||275||$117.1M|
|FEX||FENIX RESOURCES LTD||0.82||270||$20.1M|
This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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