Nanocap companies are those listed companies, which have market capitalisation of less than approximately $50 million. Investing in these companies might prove as risky investment because of their size, stability as well as manipulations. Headroom for risk to reward ratio are less in nanocaps as compared to large cap, mid-cap and small cap etc.
In the following article, we will look at five nanocap companies which had a defined business expansion plans and presented a decent performance in the last financial year. Let’s have a broader look at those:
K2 Asset Management Holdings Ltd
K2 Asset Management Holdings Ltd (ASX: KAM) is the holding company for K2 Asset Management Ltd, KII Pty Ltd, and Trusuper Pty Ltd. K2 Asset Management Ltd is involved in the business of funds management. The company announced the appointment of George Boubouras on the newly created role, i.e., Head of Research on January 31, 2020. This new position has been designed in order to assist the business with their future growth ambition.
The year 2019 had been without doubt a testing one not only for K2 but for the active management industry in general significant because of significant outflows in active assets under management. For the FY19 ended on June 30, 2019, the company reported revenue amounting to $4.8 million, out of that $4.4 million was management fees. Total expenses for the year stood at $6.6 million.
The company reported a net loss before tax amounting to $1.8 million, which resulted in an after-tax loss amount of $1.3 million. The following picture depicts an overview of monthly FUM and fund performance:
At the close of trading day on 6th February 2020, the stock of K2M last traded at A$0.053 per share.
InvestSMART Group Limited
InvestSMART Group Limited (ASX: INV) provides financial advisor services to retail investors. The company recently announced that it has received approval for change of auditor from Australian Securities and Investments Commission. The company has appointed BDO Audit Pty Ltd (BDO) as the external auditor and tax agent for INV and its controlled entities following the resignation of Ernst & Young.
In another update, the company announced that it has been assessing available growth options in order to capitalise on its strong distribution capabilities as well as brand equity in its stable of services which include, InvestSMART, Intelligent Investor and Eureka Report and its unique position of leading direct to market online digital wealth platform of Australia.
At the close of trading day on 6th February 2020, the stock of INV last traded at A$0.090 per share. The stock delivered returns of 20.00% in the span of last six months.
Ensurance Limited (ASX: ENA) is involved in the business of insurance and officially got listed on Australian Stock Exchange in 2011. The company recently announced that it has issued 2,000,000 fully paid ordinary shares to the Chief Financial Officer, namely Mr. Arjan van Ameyde under the Incentive Share Plan.
For the quarter ended 31st December 2019, the company reported GBP 5.2 million in Gross Written Premiums invoiced, reflecting a rise of 177%. The company also stated that its UK operations are poised for significant growth, with a clear pathway to positive cash flows. The company added that this record quarter follows 4 consecutive quarters of revenue growth, which represents that the investment into its UK operations is beginning to yield results.
The Company anticipates this growth to continue at an accelerated rate, underpinned by the release of new products, which are aiming new and growing markets, as well as the impact of annual insurance policy renewal cycles, as potential new customers approach their annual renewal date. The company is expecting strong revenue to continue.
At the close of trading day on 6th February 2020, the stock of ENA last traded at A$0.021 per share. The stock delivered return of 5.00% in the span of last three months.
London City Equities Limited
London City Equities Limited (ASX: LCE) is engaged in the analysis and investment in shares of United Kingdom companies. During FY19 ended on June 30, 2019, the company experienced appreciation in portfolio values because of the growth in Fiducian Group as well as its ability to locate some new investments. Hence portfolio witnessed a rise to $11.2 million from $10.0 million. It was mentioned in the release that the values have improved modestly since year end.
Also, the company declared a fully franked dividend amounting to 1.375 cents a share. At the end of year, the company experienced its net assets to move ahead to the amount of $10.8 million, or 47 cents a share. On the outlook, the company anticipates more opportunities in future.
At the close of trading day on 6th February 2020, the stock of LCE last traded at A$0.450 per share. At same current market price, the annual dividend yield of the company stood at 3.04%.
Fatfish Blockchain Limited
Fatfish Blockchain Limited (ASX: FFG) is engaged in making investment in technology and internet companies.
FFG through a release announced that the merger transaction between its subsidiary Fatfish Global Ventures AB and Swedish-listed Abelco Investment Group AB is currently unconditional as well as anticipated to close soon. The company mentioned in the release that a purchase consideration amounting to around A$12.7 million would be paid in the form of Abelco shares to FFG by Abelco Investment Group AB.
It added that the merger would develop a tech powerhouse, which will be a leading venture investment company having international presence from the Nordic region to Southeast Asia, with a portfolio surpassing 20 holdings. The merger transaction would also improve the balance sheet of FFG with listed Abelco shares, which possesses liquidity and potential further upside.
At the close of trading day on 6th February 2020, the stock of FFG last traded at A$0.008 per share.
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