2 ASX Small-Cap Shares with Potential for Significant Returns by 2030 - Kalkine Media

November 15, 2023 08:01 PM AEDT | By Team Kalkine Media
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Investors seeking long-term growth opportunities may find potential in select ASX small-cap shares within the technology sector. Despite concerns about higher interest rates impacting asset prices, certain small-cap stocks present an intriguing investment case. Here, we explore two ASX small-cap shares with growth potential and the ability to deliver substantial returns by 2030. 

  1. Frontier Digital Ventures Ltd (ASX: FDV)

The Frontier Digital Ventures share price has experienced a notable decline, down 44% over the past year and approximately 75% since November 2021. This decline creates an attractive entry point for investors, considering the company's focus on leading online 'classifieds' marketplaces in emerging regions. 

Frontier Digital Ventures primarily operates in property and automotive portals across Latin America, the Middle East, North Africa, and Asia. Similar success stories from ASX shares in analogous sectors, such as REA Group Limited (ASX: REA) and Carsales.com Ltd (ASX: CAR), underscore the potential in this market. The company's emphasis on emerging regions, where digital adoption is still growing, indicates significant room for expansion. 

The potential for growth is bolstered by the company's strong gross profit margins, reflecting favorable cost structures for delivering digital services. With substantial operating leverage potential, ASX FDV recently achieved profitability at the EBITDA level, recording $2.2 million in operating EBITDA and positive operating cash flow in the three months to September 2023. Despite these positive developments, the share price remains below previous levels, suggesting potential for future value appreciation. 

By 2030, Frontier Digital Ventures could experience substantial profit growth and see an increase in its valuation, making it an intriguing long-term investment opportunity. 

  1. Bailador Technology Investments Ltd (ASX: BTI)

Bailador Technology Investments specializes in investing in unlisted technology businesses with global addressable markets, international revenue generation, recurring revenue streams, positive unit economics, and significant growth potential. The company's current investments include businesses like Siteminder Ltd (ASX: SDR), Rezdy, Access Telehealth, Rosterfy, Nosto, and Mosh. 

One key metric highlighting the attractiveness of ASX BTI is its share price trading at a 23% discount to its post-tax net tangible assets (NTA). This substantial discount, coupled with the strong growth exhibited by the underlying businesses, creates an appealing investment opportunity. The company has demonstrated a track record of profitable exits, as seen with the sale of InstantScripts to Wesfarmers Ltd (ASX: WES). 

Despite the market not fully recognizing its potential, Bailador is currently offering a sizable dividend yield, providing income to investors during uncertain market conditions. With a focus on capital growth and dividends, Bailador appears well-positioned to deliver favorable returns by 2030. 

In conclusion, both Frontier Digital Ventures and Bailador Technology Investments present compelling cases for long-term investment, with growth potential that could lead to significant returns over the next decade. Investors may find these ASX small-cap shares attractive, especially at a time when market uncertainties create opportunities for strategic investments. 


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