Companies with low market capitalisation but often excellent growth potential are known as small-cap stocks. Investors choose these stocks because of the potential for future development. Companies with a market cap between AU$50 and AU$500 million are commonly classified as small caps, despite each stock market having its own standards. It is essential to remember that small-cap stock prices might be volatile.
The global economy has been on a rollercoaster since 2020. Most investors and asset owners are now looking for companies that are simple to buy and deliver long-term capital growth and portfolio diversity. This has narrowed their attention. For investors’ portfolios in 2022, small-cap firms with high growth potential are a suitable pick.
High returns may be achieved by investing in small-cap stocks, which are frequently exposed to a wide range of growth prospects because of their low market capitalisation. Ambitious investors with a high tolerance for risk may discover that investing in small-cap companies is convenient to avoid additional risk while still achieving their desired profits. On the other hand, investing in small caps might be riskier since many small businesses have difficulty coping with turbulence. On the other hand, others take advantage of market changes to develop rapidly.
Airtasker Ltd. (ASX: ART)
Airtasker Ltd. (ASX: ART) offers an online and mobile marketplace that lets users contract out or outsource routine tasks. Anyone who needs a task to be done will describe the task and set a budget for it. Anyone who can do the job will bid on the task. The Sydney-based ASX-listed company was founded in 2012 by two founders, Tim Fung and Jonathan Lui.
On a year-to-date basis, the shares of Airtasker have had a negative return of more than 22%. While this was happening, Airtasker recorded a record gross marketplace volume of AU$83.6 million in the first half of the financial year 2022, representing a 15.5% increase over the preceding equivalent period. In addition, the firm reported record sales of AU$13.9 million, an increase of 10.4% over the previous year. The gross profit increased by 9.5% to AU$12.9 million, a record high for the company. Tim Fung, Co-founder and CEO of Airtasker, commented on the findings, stating that the Airtasker marketplace has continued to display remarkable growth in the first half of the year. Lockdowns negatively influenced the marketplace in the first quarter; however, the market recovered quickly in the second quarter, resulting in a solid performance for the first half of the year.
However, besides it, Airtasker Ltd. (ASX: ART) saw a growth of 121% in GMV in the UK in the second quarter of fiscal 2022. The company is growing significantly in US and UK. Airtasker saw a growth of 71% in the job posting in the US.
ART stock values at $0.67 and is currently trading at a low price. Its market cap is around $278.91 million, and with its low price and future outlook, ART stock is stock investors can consider including in their portfolio.
Playside Studios Ltd. (ASX: PLY)
PlaySide is a mobile games developing company that is available for download on the Apple App Store and Google Play Store. The ASX-listed company was founded in 2011.
The company has the market reputation of working with some big giants in the entertainment industry, for instance, Warner Bros, Nickelodeon, Disney, and Pixar. On a year-to-date basis, the small-cap stock has had more than 19 percent negative return. According to the firm, sales in the first half of the financial year 2022 were AU$9.4 million, representing an increase of 87% over the same period in the previous year. PlaySide reported an after-tax loss of AU$444K, which was an improvement from the AU$2.05 million loss reported in the preceding quarter. It also successfully put “Age of Darkness: Final Stand” into Early Access on Steam and finalised the purchase of the Dumb Ways to Die (DWTD) brand for $2.25 million, representing a 1.5-fold increase in income over the DWTD 2021 fiscal year.
Earlier this month, Playside Studios Ltd. (ASX: PLY) signed work-for-hire agreements with 2K Games and Activision Blizzard, two of the world’s largest gaming publishers. Because of this and other transactions like it, they have a rising name in the business.
PLY stock values at $0.97 and has given over 162% return to its investors over the past year. Its current market cap is approximately 139.96 AUD.
Serko Ltd. (ASX: SKO)
Serko is a technology company that specialises in business travel solutions. Its corporate headquarters are in New Zealand, and it provides travel management and expenditure technologies. The firm was created in 2017 and went public on the Australian Stock Exchange in 2018.
On a year-to-date basis, the small-cap stock has had more than 32% negative return. Over the last year, the stock has dropped by more than 24%. Serko has reduced its revenue projection range for the entire year to 31 March 2022 from AU$19.5 million to AU$23 million to between AU$16.7 million and AU$19 million, a decrease from AU$19.5 million to AU$23 million. Last week, Serko offered an update on the most recent favourable trade patterns that have been seen. The corporation acknowledged that it had had minor consequences as a result of Russia’s invasion of Ukraine. Despite having a tiny number of users in Ukraine, Serko does not have any business clients. There was a slight drop in bookings from Booking.com for Business the first few days following Russia’s invasion of Ukraine, but growth has returned during the previous week.
SKO stock trades at $4.30 with a trading volume of approximately 36.95K. The current market cap of the company is around 551.63 million NZD.