Summary
- Small-cap stocks can result in huge returns; however, the investment is exposed to risks.
- In the month of April 2019, McDonald’s made a purchase of 9.9% equity stake in Plexure. Resultantly, the company’s relationship with McDonald’s continued to strengthen across FY 2019 and PLX is operating in 60 McDonald’s markets worldwide.
- PLX continues to make good progress with respect to its journey to commercialise Cxbladder tests in global market. Notably, in FY 2020, all the key performance metrics witnessed a rise on the YoY basis.
Both seasoned and budding investors have a common trait- they are always on a hunt for new opportunities. Most of the investors decide to tap opportunities that can help them in booking huge profits. Small-cap stocks are risky in nature, but at the same time, these stocks offer opportunities for making significant returns.
Small-cap Stocks
While large-cap stocks can withstand global economic shocks, small-cap stocks can face operational challenges. Therefore, a careful and proper analysis is required before entering into a small-cap stock.
Let us look at five small-cap stocks that investors are liking these days.
Plexure Group Limited (NZX: PLX)
FY20 has been a successful year for the company. The company stated that revenue from contracts with customers amounted to $25.3 Mn, reflecting a rise of 50% or $8.4 Mn from FY 2019. The company posted net profit of $1.0 Mn, implying a rise of 243% from FY 2019 loss of $0.7 million.
The company now has more than 182.7 million end-users on the platform in 60 countries.
FY20 Highlights (Source: Company Reports)
Stock Performance
The stock of PLX closed the day’s trading at NZ$1.420 per share on 12th August 2020, down by 4.70% on an intraday basis. The company has a market capitalisation of around $199.338 million. The stock has gained ~19.32% in the past one month and in the time period of 6 months it has gained ~51.06%.
ikeGPS Group Limited (NZX: IKE)
In the release dated July 30, 2020, the company informed about oversubscribed institutional placement amounting to NZ$9.8 Mn (or A$9.1 Mn). The company stated that there was participation from new as well as existing investors which includes several new Australian institutional investors. Institutional entitlement offer component of fully underwritten 1 for 7 pro-rata accelerated entitlement offer witnessed robust support by institutional as well as sophisticated shareholders and directors.
Stock Performance
The stock of IKE closed the day’s trading at $0.890 per share on 12th August 2020, down by 3.26% on an intraday basis. The company has a market capitalisation of around $111.416 million. The stock has gained ~27.21% in the past one month and in the time period of 3 months it has gained ~34.80%.
Pacific Edge Limited (NZX: PEB)
The company has accepted an investment offer of $22 million from ANZ New Zealand Investments. The company will issue 33,846,154 shares (in aggregate) to ANZ New Zealand Investments at a price of NZ$0.65 per ordinary share.
The company stated that additional growth capital would be expanding PEB’s commercial activities in the key target markets. Notably, it would allow the company to scale-up the business efficiently and quickly to help the expected rise in demand for Cxbladder.
Stock Performance
The stock of PEB closed the day’s trading at NZ$0.670 per share on 12th August 2020, down by 4.29% on an intraday basis. The company has a market capitalisation of around $485.176 million. The stock has gained ~17.54% in the past one month and in the time period of 6 months it has gained ~392.64%.
EROAD Limited (NZX: ERD)
The company has provided its quarterly update for the three months ended 30 June 2020. The company’s New Zealand sales have returned to near normal growth levels throughout both the Small and Medium (SMB) as well as Enterprise growth segments. In the release dated July 30, 2020, the company stated that, in NZ, where post lockdown economic activity has witnessed recovery, the company is operating normally. However, in North America, many customers are in lockdown.
Stock Performance
The stock of ERD closed the day’s trading at NZ$3.840 per share on 12th August 2020, down by 1.29% on an intraday basis. The company has a market capitalisation of around $262.278 million. The stock has gained ~21.18% in the past one month and in the time period of 6 months it has gained ~24.67%.
AFT Pharmaceuticals Limited (NZX: AFT)
AFT Pharmaceuticals (NZX.AFT) came forward and made an announcement that it has signed an exclusive Maxigesic IV® licensing as well as supply agreement for Bulgaria, Cyprus, the Czech Republic, Hungary, Romania and Slovakia, countries having combined population of over 53 million. Earlier, the company made an announcement that its NZ$2 Mn SPP has closed oversubscribed. As per the release, SPP witnessed robust shareholder support, with the company receiving applications totalling ~NZ$9.8 Mn.
Stock Performance
The stock of AFT closed the day’s trading at NZ$4.550 per share on 12th August 2020, down by 2.78% on an intraday basis. The company has a market capitalisation of around $475.788 million. The stock has gained ~11.51% in the past one month and in the time period of 6 months it has gained ~21.98%.
The sole motive of an investor is to grow his/her capital over a period to meet financial goals. In pursuit of this, investors are in a constant hunt for stocks that have capital appreciation potential and those that pay dividends, which one can reinvest to further increase the rate of return. Dividends can also be seen as an incentive for an investor to hold the stock for a longer duration of time, especially when the overall market enters a bear phase, or the underlying invested company goes through business troughs and peaks.
Stocks that have high dividend yield are considered to be a safe bet, but to take a blanket call just on dividend yield would be naive, as there is more to be analyzed to make a sound judgment on the ability of the business to keep paying a dividend over long periods.
Companies over time, increase dividend payout, and in the long term, an astute investor can reap high rewards by picking good dividend stocks, across sectors, thus diversifying and reducing the volatility of one’s portfolio. Investors in New Zealand can reap the benefit of dividend imputation credit and further increase their overall return on investment.
So, how should one pick a dividend stock? How to invest in stocks that have the wherewithal to not only pay a dividend but also increase dividend payout over the years?
With Kalkine, you will find answers to these questions, as we conduct a detailed analysis of companies based on quantitative and qualitative parameters.
Sound dividend stocks are investors' delight. They provide the benefits of capital appreciation and the joy of constant income despite the market volatility.
Disclaimer
