Top 3 small-cap stocks on NZX in the past month

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Top 3 small-cap stocks on NZX in the past month

 Top 3 small-cap stocks on NZX in the past month
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Highlights

  • Small-cap stocks are stocks of small companies but are highly volatile.
  • They offer a bigger room for growth compared to larger firms, subsequently gaining investors’ attention.
  • Pushpay, PGG Wrightson and Warehouse Group are 3 small-cap stocks on the NZX delivering positive returns.

Small-cap stocks are stocks of less stable companies and are highly volatile stocks. These stocks are risky bets as they are stocks of lesser popular companies. Many small companies are well-established firms delivering strong profits and margins.

These companies have a market cap between $300 million and $2 billion. Small-cap stocks can help in the diversification of portfolios when they are combined with other investment strategies. These companies show a higher-growth potential and offer a bigger room for growth compared to larger firms, subsequently gaining investors’ attention.

Amid this background, let’s look at how these 3 small-cap stocks have done in the past month.

Source: © Richelle538 | Megapixl.com

Pushpay Holdings Limited (NZX:PPHASX:PPH)

Functioning as a donor management system for churches and charities, Pushpay Holdings has a market cap of $1.39 billion and has given a return of 15.09% in the past month.

DO READ: From KPG, RBD to OCA- 5 NZX small caps flying high in 2022

Pushpay registered positive growth in FY22 despite facing economic and sector headwinds. The Group posted a 13% rise in operating revenue to US$202.8 million and a 31% increase in customer numbers to 14,508, propelled by the ResMedia acquisition and organic initiatives.

ALSO READ: RAK, GEO, SCT: Why are these NZX tech stocks grabbing attention in 2022?

PPH also reset its go-to-market strategy in FY22 and expects underlying EBITDA between US$56.0 million and US$61.0 million for FY22. It also has a strong growth outlook for FY24 with the company anticipating more than US$10 billion of the total processing volume.

PGG Wrightson Limited (NZX:PGW)

A key supplier to the NZ agricultural sector, PGG Wrightson has a market cap of $0.35 billion and has given a return of 12.29% in the past month.

ALSO READ: SEK, SCL, PGW- 3 NZX agri stocks under the spotlight

The Group witnessed an 11% rise in revenue and a 20% increase in operating EBITDA in the first half of FY22. PGW continued to see strong demand in Q3 also, leading to a brilliant performance across its business units.

On the back of strong results, the Group lifted its operating EBITDA guidance from $62 million to $66 million. NZ borders’ opening is likely to benefit business though uncertainty related to COVID-19, and supply-chain disruptions remain.

The Warehouse Group Limited (NZX:WHS)

One of the biggest retailer groups of NZ, Warehouse has a market cap of $1.13 billion and has given a return of 1.87%.

DO READ: My Food Bag (NZX:MFB) delivers 18% rise in FY22 profit, shares up ~8%

Warehouse group fared relatively well in Q3 with a solid performance despite facing supply-related constraints, shipping delays and customers remaining reluctant to go in-store.

Its online sales witnessed an increase of 7.4% to $86.6 million in the third quarter of FY22 and YTD sales were up 50% in FY22 compared to FY21 YTD. However, the Group sales were down 2.5% and Group-wide in-store foot traffic was down 13% in Q3 compared to the same quarter in FY21.

Bottom Line

Small-cap stocks have the ability to outperform large-cap stocks but also carry high risk and are less liquid compared to bigger companies.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)

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