PGW, MHJ, OCA: 3 NZX small-cap stocks grabbing Kiwis’ attention

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PGW, MHJ, OCA: 3 NZX small-cap stocks grabbing Kiwis’ attention

 PGW, MHJ, OCA: 3 NZX small-cap stocks grabbing Kiwis’ attention
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Highlights

  • Small-cap stocks are generally laced with huge growth potential
  • PGG Wrightson raises its FY22 operating EBITDA guidance
  • Oceania Healthcare to conduct its Annual Meeting of Shareholders in coming few weeks

Broadly speaking, small-cap stocks are those companies that have a market cap in the range of $300 million to $2 billion. A major advantage of investing in these stocks is growth prospects which, at times, surpass those of larger companies. Also, being fairly priced, these small caps are not taxing on their investors’ pockets.

Moreover, generally having better organic growth than their peers, small-cap stock companies have potential to become mid-cap or large-cap companies in the future.

That said, let us now explore the three NZX-listed small-cap stocks.

 NZ small-cap stocks- PGW, MHJ, OCA

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PGG Wrightson Limited (NZX:PGW)

PGG Wrightson Limited is an agricultural supply business catering to NZ framers to service their on-farm needs, having a market cap of around NZ$348 million.

Do Read: SEK, SCL, PGW- 3 NZX agri stocks under the spotlight

Last month, owing to a continued solid demand during Q3 and an impressive performance by most of its business units, the Company lifted its FY22 operating EBITDA guidance to about $66 million from the earlier given guidance of $62 million.

Though uncertainty related to COVID-19 still persists, PGW is confident for the year ahead.

On 3 June, at the time of writing, PGW was up 1.54% at NZ$4.610.

Michael Hill International Limited (NZX:MHJ; ASX:MHJ)

NZ’s famous jewellery retailer is Michael Hill International Limited, which has a market cap of about NZ$431 million.

Must Read: WHS, BGP, MHJ- Retail stocks as NZ govt stays firm on supermarket duopoly

The Company had recently sold its Canadian credit receivables for about AU$12 million, to Flexiti, a Canadian consumer credit provider, for offering third-party consumer credit across all of Michael Hill’s Canada-based stores.

This will not strengthen its balance sheet but will also enhance its customer base.

On 3 June, at the time of writing, MHJ was gaining 0.91% at NZ$1.110.

Oceania Healthcare Limited (NZX:OCA)

Oceania Healthcare Limited is NZ’s leading operator of retirement villages and aged care providers. It has a market cap of about NZ$724 million.

Also Read: RYM, OCA: 2 retirement village stocks with good 1-month returns

A few days ago, the Company announced organising its Annual Meeting of Shareholders on 23 June, which can also be attended online.

Apart from the election of a few directors, OCA also intends to pass a resolution related to authorising its directors to fix its auditor, PricewaterhouseCoopers’ remuneration for the ensuing year.

On 3 June, at the time of writing, OCA was up 2.28% at NZ$1.030.

Bottom Line

Small-cap stocks present a lot of scope to expand in the future and tend to generate alpha over the long term. However, these stocks have high risk and are less liquid when compared to other big firms.

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