Hello there I’m James Preston for Kalkine TV and this is the Hot Performers show where we take
a look at market trends that are sizzling! Today we’re foucssing on how small cap stocks on the ASX
can impact your portfolio in 2022. [e] Since 2020, the world economy has endured a
rollercoaster ride. This has sharpened the focus of most investors and asset owners
who look for stocks that are easy to acquire and offer long-term capital growth and portfolio
diversification. Under this scenario, small cap stocks with good growth potential seem to be an
apt choice for an investor’s investment portfolio for 2022. [w] Amid this backdrop, let us look at
the performance of the S&P/ASX Small Ordinaries in 2021, and a few small-cap stocks. [e]
The S&P/ASX Small Ordinaries index has performed well when compared to the benchmark index
S&P/ASX 200. [g] In the last year, S&P/ASX Small Ordinaries has delivered a return of 21.69%,
whereas S&P/ASX 200 delivered 18.39%. [e] Similarly, if we see the Year-to-date performance
of these two indices, we can see that S&P and ASX Small Ordinaries surpassed the S&P/ASX 200
performance. [g] S&P/ASX Small Ordinaries delivered a year-to-date return of 14.74%,
whereas S&P/ASX 200 index had a year-to-date return of 11.96%.
[e] S&P/ASX Small Ordinaries index is a benchmark index for small-cap Australian equity
portfolios and is intended to evaluate companies included within S&P/ASX 300. On the other hand,
the ASX 200 index comprises of 200 biggest index-eligible stocks registered on the ASX by
float-adjusted market cap. What are the benefits of including ASX small-cap stocks in portfolio?
Compared to mid-cap and large-cap stocks, small-cap stocks have significant upside
growth potential. As a result, small-cap stocks help passive investors to boost their
returns. [g] Small-cap stocks have a market cap in between AU$300 million to AU$2 billion. [e]
Another advantage of including small-cap stocks into the portfolio is that there is a high merger
and acquisition chance. With this, large companies get access to new markets and to the intellectual
property of the small companies. Here are two Small-cap ASX stocks with significant growth in
2021. First up is Queensland Pacific Metals, which is a nickel exploration company. The company owns
Townsville Energy Chemicals Hub. [g] In 2021, the Company has delivered a return of 671.42%.
Queensland Pacific is trading at AU$0.258 with a market cap of AU$359.23 million. [e]
On the 27th of September 2021, the company provided an update that the Queensland Government
had declared Queensland Pacific Metals’ Townsville Energy Chemicals Hub Project as a ‘Prescribed
Project’. A Prescribed Project is considered an economically and or socially significant project
to the region, in this case, Queensland. This declaration also grants the coordinator-General
the power to intervene, if necessary, in state and local government approval processes to ensure
timely decision making. [w] The TECH Project is in Townsville and is being developed into
a sustainable producer of critical metals for the lithium-ion battery and electric vehicle
sector. [e] TIME NOW FOR a very short break on the hot performers before we turn our attention
to luxury goods retailer Cettire. @@@@@@@@@@@@@@@@@@
Thanks for tuning into kalkine tv, I’m James Preston and this is the hot performers,
a show where we take a look at sizzling market trends. In this edition we are taking a look at
small cap stocks and their ability to impact your investment portfolio. Let’s now turn our
attention to luxury goods retailer Cettire. Cettire sells various items from more than 500
designers comprising women’s & men’s clothing from world-renowned brands like Saint Laurent,
Gucci, Prada and Valentino. [g] The Company made its ASX debut on 18 December 2020, and in 2021,
its shares have delivered a growth of 548%. Cettire is trading at AU$3.16 with a market
cap of AU$1.21 billion. [e] Financial year 21 was an exceptional year for the Company
with significant growth in the number of active customers, robust revenue growth, product margins
and a rising proportion of revenues from repeat clients. The Company implemented several important
improvements to its consumer proposition, [w] that involved embedding free returns
and increasing its addressable market by means of its entry into the children’s wear division. [e]
SO TO SUM IT ALL UP, these small cap companies have performed exceptionally well during the
pandemic and have showcased the potential that small cap stocks offer if they are
part of a portfolio. So it might well be time to update your own. THAT’S ALL for Hot Performers,
exclusive to Kalkine TV. Make sure to keep watching for the latest market updates and
business news – I’m James Preston signing off for now.