The powerful stockmarket performance of the last two years has brought a new generation of investors to the stockmarket. At Eureka Report we believe ‘It’s Time’ for these investors to widen their investing lens beyond the banks and blue-chips to small and medium-sized companies where the real price action will take place in the months ahead.
As the market teeters on a long overdue correction (we’ve lost 5% this year so far) we’re watching both for bargains and for situations that might demand an exit.
Today I want to detail just how lively our local market has become and then hand pick a number of situations an active investor might need to be across during this month’s earnings season.
The kick-off for the reporting season is an especially anxious time for investors. Every reporting season throws up its fair share of surprises, but investors should brace for violent price swings given that the dismal trading start to the month is adding to tension.
The 2.8% losses suffered in January were extended into February, with the All Ordinaries Index shedding a further 2% due to global economic headwinds.
We have to see meaningful earnings growth this year if the market has any hope of marking another year of gains after the All Ordinaries delivered 20% total return in calendar 2013. The problem is that the jury is still out on the profit front, and the outlook statements from this month’s reporting season will play a big part in setting the tone of the market for the next six-months.
Volatility back from the grave
Investors are already walking a tightrope with the dramatic share price swings of electronics retailer JB Hi-Fi (JBH), budget retail chain The Reject Shop (TRS) and packaging company Colorpak (CKL) a sign of things to come for managers who surprise the market. If a company fails to meet expectations, it will be harshly dealt with. If it exceeds, it will likely enjoy a strong bounce.
If volatility is the barometer of tension, then the blood pressure of shareholders has risen markedly in recent times. Short-term share price gyrations on the S&P/ASX Small Ordinaries, as indicated by the 10-day average volatility, have more than doubled in magnitude in three weeks to 18%.
While the level of “fear” is nowhere close to what it was mid last year, when the 10-day gauge spiked to over 30%, it still stands in contrast to last February when the volatility reading was hovering under 10%.
The Reject Shop contributed to the volatility when it plunged over 30% on disappointing earnings, while JB Hi-Fi surged 4% this week on upbeat first half earnings. Both stocks are part of the small ordinaries.
Stocks in the hot seat
The question bugging investors is who could be next to spring a surprise? There is no shortage of candidates.
Among the companies on my “outperform” list, there is a risk that women’s apparel retailer Specialty Fashion Group (SFH) could disappoint as the retail environment is still throwing up very mixed signals.
The issue facing Specialty Fashion is the “curse of expectations”. The group managed to post a turnaround in net profit of $13 million in 2012-13, from a loss of $2.8 million the year before, as it emerged from a restructure.
Shareholders now want to see top-line growth, with the market pencilling in a 0.7% increase in sales to $313.3 million for the six months ended December 31. That doesn’t sound like much of a hurdle, but investors are expecting sales growth to accelerate in the second-half with full-year revenue tipped to expand 16.4% to $663 million.
Management’s outlook statement will be scrutinised closely for any early signs of disappointment. But investors can take some comfort from the strong result of rival Country Road (CTY), which managed to deliver a 27% upswing in interim revenue to $346.3 million from its Australian stores.
What is expected to bolster Specialty Fashion’s sales is its online push and the recent acquisition of Rivers Australia, although shareholders will have to wait until 2014-15 to feel the full earnings benefit from the deal.
Watch this space, as Specialty Fashion could go either way when it releases its result on February 25. But if it does get sold off, it will be a buying opportunity for longer-term investors. I reiterate my “outperform” call on the stock, which is trading around 86 cents. Country Road is not part of the Uncapped 100.
Another on the “buy” list that is causing some amount of anxiety is engineering contractor NRW Holdings (NWH), especially since LogiCamms’ (LCM) depressing update yesterday. This drove LogiCamms to its worst one-day loss on record, when it plunged 22.5% to $1.10.
LogiCamms warned that earnings before interest, tax, depreciation and amortisation (EBITDA) would come in between $11 million and $13 million for 2013-14, compared with last year’s figure of $14.1 million.
The drop might appear relatively minor in a sector that is used to big profit downgrades – such as the recent experience with Forge Group (FGE) – but the LogiCamms news is still a blow to confidence, as management had been guiding for earnings growth this financial year and analysts were forecasting EBITDA of $16.4 million.
While the trading update is disappointing, I am sticking to my “outperform” call on the stock as the damage is largely done with the stock. It is trading on a 2013-14 price-earnings (P/E) ratio of around eight times, and a P/E of seven times for the following year if I factor in a relatively conservative 10% earnings growth.
What’s perhaps more encouraging is management’s implicit comments that things have picked up in recent months. Indeed, the company’s guidance indicates that three quarters of expected profit will be booked in the six months to the end of June this year.
Further, most of the earnings miss can be attributed to a softer-than-expected first-half, with the new downbeat company guidance suggesting that second-half earnings are tracking close to market expectations.
I also do not think its dividend is under threat, and LogiCamms has the financial muscle to hold distributions steady at 9 cents a share. That might disappoint some investors given that the consensus expectation is calling for a 9.5 cent payout; but even a flat dividend would put the stock on an attractive fully franked yield that’s close to 12%.
Coming back to NRW, no news is good news. One would have thought if the contractor needed to issue a profit warning, it would have done so already.
Just meeting expectations might just be enough to send the stock higher because, unlike LogiCamms, the market doesn’t have much confidence in NRW’s outlook. What’s more, the market is expecting NRW to post a 34.5% decline in sales to $530.7 million and a 45.9% slump in net profit to $26.3 million for the six months ended December.
Further, analysts believe shareholders will have to wait until 2015-16 to see modest earnings growth for the group, with the stock trading on an attractive P/E of under seven times for the next few years and a gross-up yield of over 10%.
I am reiterating my “outperform” rating on NRW, although those looking to buy might prefer to wait until after the release of its half-year result on February 27. LogiCamms will announce its results the day after.
An Uncapped 100 stock that could deliver a pleasant surprise that I’m adding to my “buy” list is NetComm Wireless (NTC).
I am expecting management to give an update on the many global deals it struck over the course of 2013 when the wireless device maker announces its half-year result in mid-February.
One of the more significant deals NetComm struck is with Vodafone. NetComm will supply machine-to-machine (M2M) to the telecom giant on a global basis. M2M is one of the fastest growing technology segments as things like smart meters and contactless cards are becoming ubiquitous in everyday life.
The company is also entering the United States M2M market through a partnership with SYNNEX Corporation and Verizon Wireless, and also has struck a supply agreement with United Arab Emirates’ telco Etisalat Group for its M2M equipment.
Updates on these deals and on wireless device sales to the National Broadband Network could well make NetComm’s full-year guidance look conservative, even though the 2013-14 figures are expected to be significantly ahead of the previous year’s.
The company is predicting that EBITDA will come in between $4.6 million and $5.1 million, and revenue to reach $58 million to $63 million. NetComm booked an EBITDA of $803,000 and sales of $42.9 million in 2012-13.
Colorpak loses hue
Meanwhile, Colorpak is the latest member of the Uncapped 100 to hand in its report card, and it left investors seeing red. The stock suffered its worst one-day sell-off on Tuesday since recording a similar crash back in 2008. You can read the details of its half-year results here.
Management is promising a turnaround in 2014-15 after posting a 44% decline in half-year net profit to $2.7 million due to higher-than-expected restructuring costs and weaker customer demand.
Thankfully, the unexpected drop in profit won’t impact on dividends. Colorpak is holding its fully franked interim dividend at 1.75 cents a share.
The stock is not expensive, as it is trading on a 2014-15 price-earnings multiple of around eight times and a yield of close to 7% once franking credits are included.
But a stock like Colorpak should be attractive for its relatively defensive business, and it is clear it has not reached that transition point. This duckling has yet to turn into a swan, and investors looking to buy Colorpak for its recovery need not rush.
This is why I am downgrading my recommendation to “neutral” from “outperform”. Colorpak was first highlighted as a buying opportunity on July 17 last year when it was trading at 73 cents, before peaking at 89 cents in December. The stock was trading around 80 cents today.
Think big, go smalls!
* This article is part of the “It's Time” series in Eureka Report focussing on new opportunities for investors in 2014. Click here to see the entire series.
Uncapped 100 stocks with an "outperform" recommendation
|Name||Code||Date of rec||Price*||Total rtn since (%)||Article Name|
|eBet||EBT||26-Jun-13||$1.13||169.1||Small cap with biggest earnings upgrade|
|Silex Systems||SLX||3-Jul-13||$2.32||-11.42||Why a dog can be an investor's best friend|
|Newsat||NWT||3-Jul-13||$0.40||18.35||Why a dog can be an investor's best friend|
|Tiger Resources||TGS||3-Jul-13||$0.19||80.26||Why a dog can be an investor's best friend|
|M2 Telecommunications Group||MTU||10-Jul-13||$6.02||2.27||Big expectations for small caps|
|Starpharma Holdings||SPL||17-Jul-13||$0.94||-17.55||Five bargains for under a buck|
|GI Dynamics||GID||17-Jul-13||$0.60||28.33||Five bargains for under a buck|
|Horizon Oil||HZN||17-Jul-13||$0.36||-12.91||Five bargains for under a buck|
|Collins Foods||CKF||7-Aug-13||$1.76||17.43||The next dividend dazzelers|
|LogiCamms||LCM||7-Aug-13||$1.47||-27.79||The next dividend dazzelers|
|NRW Holdings||NWH||14-Aug-13||$1.14||21.43||A mining services revival?|
|WDS||WDS||14-Aug-13||$0.59||72.83||A mining services revival?|
|Thinksmart||TSM||21-Aug-13||$0.36||31.39||Biggest smalls earnings surprises|
|Beadell Resources||BDR||28-Aug-13||$0.87||-13.29||Short-selling gold signals|
|Universal Biosensors||UBI||4-Sep-13||$0.68||-30.15||Smalls in sweet spot|
|Specialty Fashion Group||SFH||18-Sep-13||$0.93||-7.53||Small cap surprises for 2014|
|Mint Wireless||MNW||2-Oct-13||$0.18||80.56||Four new stocks for Uncapped|
|YTC Resources||YTC||9-Oct-13||$0.26||-9.62||Xmas sale starts early for small caps|
|Ridley Corporation||RIC||16-Oct-13||$0.85||-5.29||Appetisers from the agri stocks field|
|Wide Bay Australia||WBB||16-Oct-13||$5.60||3.04||Appetisers from the agri stocks field|
|STW Communications||SGN||30-Oct-13||$1.58||-10.48||Small consumer stocks at Christmas crossroads|
|Retail Food Group||RFG||30-Oct-13||$4.58||-8.52||Small consumer stocks at Christmas crossroads|
|Nanosonic||NAN||6-Nov-13||$0.83||4.22||First profit, first choice for stock pickers|
|AMA Group||AMA||6-Nov-13||$0.37||-23.29||AMA chief's double plan|
|eServGlobal||ESV||13-Dec-13||$0.70||25.71||Calculating Bitcoin's flow-on effects|
|CTI Logistics||CLX||18-Dec-13||$2.350||2.98||CTI's road to expansion|
|Altona Mining||AOH||4-Feb-14||$0.17||2.94||Special Report - A small miner you cannot miss|
|*Price on date of publication|
|Source: Eureka Report, Bloomberg|
Uncapped 100 - Australia's most interesting small cap stocks
|Small cap stocks covered by the Uncapped team|
|Code||Name||Rationale||Market cap ($m)||Total return 1-year (%)||Sector (GICS)|
|NHF||NIB Holdings||Only listed health insurer. Widely held. Good performer.||1,101.90||15.2||Financials|
|MTU||M2 Group||Amazing growth story and well run company. High free float and strong insto support.||1,080.79||45.36||Telecommunication Services|
|GEM||G8 Education||Only listed childcare operator. Acquisition strategy paying off with stock delivering solid gains.||951.88||101.31||Consumer Discretionary|
|MMS||McMillan Shakespeare||One of the best performers since the GFC, but ongoing risk of change to FBT rules will hang over the company.||855.54||-15.31||Industrials|
|ARP||ARB Corp||Well covered but good candidate for core holding due to quality management.||814.69||0.79||Consumer Discretionary|
|AAD||Ardent Leisure Group||Widely held stock. Earnings more defensive than anticipated. Good yield. Potential core holding.||806.06||35.55||Consumer Discretionary|
|SRX||Sirtex Medical||A shining star in the biotech space and one of the best performing stocks in 2012. Great product (liver cancer treatment) and bright outlook.||783.83||19.5||Health Care|
|GXL||Greencross||Acquisitive veterinary group that is embarking on new growth phase via merger with pet products retailer||769.89||126.11||Health Care|
|BGA||Bega Cheese||Corporate interest in Australian food companies makes the cheese maker worth following.||746.77||120.91||Consumer Staples|
|MRM||Mermaid Marine Australia||Its strategically located facility on WA coast gives it a key advantage over competition in servicing Gorgon & Pluto projects.||665.39||-25.23||Industrials|
|AUB||Austbrokers Holdings||The insurance broker is a strong performer. Widely held and well liked by small cap investors.||664.68||33.32||Financials|
|RFG||Retail Food Group||Owns a number of well know franchise brands. Widely followed by instos.||604.29||32.49||Consumer Discretionary|
|BDR||Beadell Resources||Will be a very big FY14 for miner as it has to prove it aims to produce 200,000 ounces of gold a year.||593.05||-18.48||Materials|
|SGN||STW Communications Group||One of few companies able to benefit from online shift. Widely held and good insto support.||570.41||15.75||Consumer Discretionary|
|CWP||Cedar Woods Properties||Property developer with good ROE and earnings growth track record.||551.15||50.58||Financials|
|BRU||Buru Energy||Substantial size but not often covered by press. Widely held with good insto support.||544.77||-23.96||Energy|
|TGR||Tassal Group||Salmon farmer is finally turning a corner with an improved harvest strategy and growing demand for product.||498.86||124.1||Consumer Staples|
|AMM||Amcom Telecommunications||Well covered junior telco but good candidate for core holding.||480.55||33.09||Telecommunication Services|
|SEA||Sundance Energy Australia||Analysts have a favourable take on the oil & gas explorer, but stock is still under radar of most. Sundance provides exposure to prospective Eagle Ford shale.||456.23||5.91||Energy|
|CCP||Credit Corp Group||Strong price run attracted good investor interest. Leveraged to any rise in loan defaults. Not well covered by press.||439.18||10.18||Industrials|
|TOX||Tox Free Solutions||Widely held stock in the waste solutions business. Its unique because it operates in a defensive-growth niche.||437.70||4.29||Industrials|
|NXT||NEXTDC||The cloud computing company is an IT sector darling. Fairly widely held and followed.||420.47||27.38||Telecommunication Services|
|RCR||RCR Tomlinson||Good first half FY13 result and outlook, but will its fortunes change this year with the mining capex slowdown?||417.61||34.73||Industrials|
|IPP||iProperty Group||Worth watching as it is trying to be the REA Group of Asia.||415.40||134.87||Information Technology|
|MYX||Mayne Pharma Group||Sizeable generic drug maker with interesting board members.||412.73||92.76||Health Care|
|MYS||MyState||Well regarded and could make good alternative to bank stocks. Has good yield and earnings growth over past few years.||410.00||25.14||Financials|
|HZN||Horizon Oil||One of better regarded small energy stocks that doesn't receive much media attention.||396.85||-28.92||Energy|
|CCV||Cash Converters International||Strong performance is attracting investors. It's Australia's only listed pawn shop and pay day lender.||370.88||-21.91||Consumer Discretionary|
|NWH||NRW Holdings||One of the better regarded mining & civil contractors with good track record in delivering on projects.||366.74||-23.32||Industrials|
|MOC||Mortgage Choice||Has a good track record and is leveraged to any housing recovery. The stock is also liquid with good insto support.||363.91||64.01||Financials|
|SLX||Silex Systems||Its uranium enrichment technology could become one of Australia's best innovations given its potential to change the nuclear power industry.||350.96||-33.55||Information Technology|
|SHV||Select Harvests||Noteworthy for turbulent past and exposure to soft commodity market.||339.38||247.34||Consumer Staples|
|UXC||UXC||Company has turned corner and enjoyed re-rating. What's next?||336.58||1.3||Information Technology|
|ACR||Acrux||One of the more successful Australian biotechs in recent history but has run into some headwinds. Widely held by instos.||320.55||-43.99||Health Care|
|TFC||TFS Corp||The sandalwood products company offers exposure to both the agri and cosmetics industry. It will start commercial harvest this year.||319.54||113.93||Materials|
|AEU||Australian Education Trust||Well performing childcare centre property owner. Good yield story and outlook.||311.71||22.21||Financials|
|GID||GI Dynamics Inc||Largely forgotten by investors after poor IPO but could attract attention this year as it looks to gain US approval to use its intestinal liner on diabetics.||300.28||2.67||Health Care|
|TGA||Thorn Group||One of few retail stocks that is performing well despite its flat outlook for FY14. The Radio Rentals chain owner is also well supported by instos.||298.99||6.84||Consumer Discretionary|
|BNO||Bionomics||One of the larger cancer treatment developers in this market.||298.23||77.58||Health Care|
|IMF||Bentham IMF||Litigation funder is unique stock. Stock not liquid but its outlook appears promising given the number of potential class action lawsuits.||281.91||1.88||Financials|
|NWT||Newsat||Potential large cap if it can launch its own satellite in 2015.||276.51||N/A||Telecommunication Services|
|RKN||Reckon||Fierce competition for cloud base accounting software puts it in firing line.||275.42||-8.91||Information Technology|
|TGS||Tiger Resources||Future lies in its Kipoi copper mine expansion in the Congo but miner is fully funded with DRC govt holding 40% stake in tenement. Next 12mths will be interesting.||274.93||2.24||Materials|
|AJA||Astro Japan Property Group||Strong leverage to Japanese economy makes this an interesting stock to watch.||256.08||15.45||Financials|
|VOC||Vocus Communications||Telecom stocks are in favour for their dividends but Vocus is one of the least covered||255.26||76.38||Telecommunication Services|
|RIC||Ridley Corp||High corporate interest in the sector and the shrinking pool of agri listed stocks make Ridley worth following.||247.79||-25.05||Consumer Staples|
|CLH||Collection House||In similar space as Credit Corp. Strong stock performance has attracted a following and the stock appears to be well placed to run further||233.43||35.87||Industrials|
|NAN||Nanosonics||A successful medical tech story. Should be close to turning in maiden profit with its disinfection device.||227.60||71.29||Health Care|
|SPL||Starpharma Holdings||Noteworthy for its good pipeline of innovations. Well run, widely followed.||223.45||-33.19||Health Care|
|ESV||Eservglobal||Mobile money transfer company that has been gaining traction. Widely held by instos but low press coverage||223.12||112.05||Information Technology|
|MXI||MaxiTRANS Industries||Transport equipment maker posted good interim result. Has appealing yield and growth.||220.79||24.9||Industrials|
|WBB||Wide Bay Australia||The building society is trying to turn its fortunes around. Also worth watching for its exposure to Queensland housing market, particularly around major resource projects.||209.10||-12.73||Financials|
|RCG||RCG Corp||The footwear retailer is one of the best performing consumer stocks as online competition is not a big threat. Company has a good yield as well.||205.91||67.97||Consumer Discretionary|
|HSN||Hansen Technologies||Operates in a high potential/growth industry but is not covered by press or brokers.||195.90||42.66||Information Technology|
|IFM||Infomedia||Interesting tech play in the car parts market. Strong share price gain but gets little air play.||193.65||81.68||Information Technology|
|PFL||Patties Foods||Illiquid stock but has suite of well recognised consumer brands. Defensive yield.||193.41||-12.3||Consumer Staples|
|NEA||Nearmap||A stellar performer with an Interesting business that offers high quality aerial maps to companies & government.||190.29||726.09||Information Technology|
|ACL||Alchemia||One of the few biotechs with revenue stream. Good pipeline of oncology treatments.||186.54||91.67||Health Care|
|CKF||Collins Foods||One of the few food franchise listed companies.||185.77||38.42||Consumer Discretionary|
|SAR||Saracen Mineral Holdings||Emerging gold producer that is widely held by instos. Hitting milestones and looks cheap. Key asset is close to gold majors, which makes it a potential takeover target.||184.53||-20.51||Materials|
|DWS||DWS||Will be a big beneficiary if governments start spending on IT again.||169.42||-15.16||Information Technology|
|SFH||Specialty Fashion Group||In early stages of turnaround. Can the women's apparel retailer sustain the momentum?||165.32||1.71||Consumer Discretionary|
|CLX||CTI Logistics||Logistics solution company with good track record of growth and exposure to online retail and large gas projects on West coast.||157.31||52||Industrials|
|GHC||Generation Healthcare REIT||One of the more interesting REITs. Income is more defensive than typical property stock and its greenfield expansion gives it earnings growth potential.||142.81||33.83||Financials|
|SIV||Silver Chef||Strong jump in the share price of the equipment financing group has attracted a good following.||141.83||-11.48||Industrials|
|DTL||Data#3||Well respected IT company that receives little press coverage.||134.73||-30.92||Information Technology|
|MNW||Mint Wireless||Huge market potential if the mobile card payment solutions provider can gain market traction. Management aiming for $1 billion in transaction value a year.||131.26||1610.53||Information Technology|
|WDS||WDS||Widely held with strong insto support. Engineering contractor diversified across mining, energy and infrastructure.||129.54||74.28||Industrials|
|IMD||Imdex||Drilling company is well supported by instos and should benefit from any rebound in exploration activity.||126.28||-64.96||Materials|
|BGL||BigAir Group||The wireless small cap has gained strong following over past year or two but is often overlooked by investors and the press.||125.87||28.4||Telecommunication Services|
|POH||Phosphagenics||Sizable biotech with a game changing FY14 year ahead. Good insto following but questions of poor audit and governance standard could dog company.||122.46||-20||Health Care|
|MCP||McPherson's||The personal care and household products supplier had been relatively insulated from volatile discretionary spend and online threat, but growing earnings is still a challenge.||121.25||-38||Consumer Discretionary|
|DRM||Doray Minerals||Widely held by instos. One of the more favoured gold explorers by brokers.||119.19||14.29||Materials|
|MLB||Melbourne IT||A perennial underperformer could be interesting turnaround story as it undergoes a restructure.||115.87||14.42||Information Technology|
|AZZ||Antares Energy||Liquid with good insto support. Already in production with exploration upside in Texas.||104.55||-22.64||Energy|
|REX||Regional Express Holdings||Well run airline that is overshadowed by Virgin and Qantas.||96.39||-24.57||Industrials|
|RUL||RungePincockMinarco||IT company to resource industry. Facing tough operating climate with new CEO trying to restructure and turnaround company.||95.41||6.8||Industrials|
|AMA||AMA Group||Good turnaround story but under the automotive services group is radar of most.||93.59||-22.95||Consumer Discretionary|
|AOH||Altona Mining||Noteworthy copper play with Xstrata pull-out of Roseby project in Australia and the good ramp up of its Finnish project.||93.14||-18.6||Materials|
|EML||Emerchants||Trying to change way corporates and governments disburse cash with its trackable and controllable debit card offering. If company can get $1 billion in loaded value on cards, the stock will surge.||91.01||305.56||Financials|
|CLV||Clover Corp||One of the star performers in 2012. Operates in growing but relatively stable niche.||87.55||5.86||Health Care|
|UBI||Universal Biosensors Inc||Well regarded biotech and one of few that's successfully manufacturing in Australia. Struck deal with a few global medical companies.||83.29||-44.77||Health Care|
|BOL||Boom Logistics||Crane hire group is riding out the downturn in construction. It's widely held by instos and is very liquid.||80.73||-39.29||Industrials|
|CAA||Capral||An aluminium manufacturer that is actually holding up relatively well given that manufacturing is on the nose.||80.45||-24.44||Materials|
|LGD||Legend Corp||Electronic parts supplier to utilities and other industries. Stable earnings with good yield. Often overlooked.||80.12||34.81||Information Technology|
|JIN||Jumbo Interactive||Innovative small cap facing off industry dominated by giants. Worth watching to see if it can carve out a profitable global business.||79.46||-35.2||Consumer Discretionary|
|YTC||YTC Resources||Next 12-mths will be eventful after YTC secured funding for its projects from Glencore.||77.00||-14.55||Materials|
|LCM||LogiCamms||Strong price performance and reasonable valuation attracting interest.||74.03||-20.14||Industrials|
|PEN||Peninsula Energy||Widely held by instos and large free float. It's the only uranium miner on the list.||71.56||-42.11||Energy|
|TAN||Tandou||The only direct equity exposure to cotton prices. Also trades water rights and receives little press.||70.15||8.79||Consumer Staples|
|GXY||Galaxy Resources||Good upside potential if it can get its problem-prone Jiangsu plant back on track. Won't be easy to right this ship.||68.81||-74.18||Materials|
|TSM||ThinkSmart||Potential turnaround story worth keeping eye on.||67.36||87.92||Financials|
|CKL||Colorpak||The small cap packaging company has grown via acquisitions over past few years.||61.97||24.43||Materials|
|FGE||Forge Group||Good track record has been marred by a recent shock downgrade and capital raising. How long will it take to redeem itself?||60.32||-87.18||Industrials|
|KOV||Korvest||The construction products and services supplier has been hit by project delays and deferrals. But its relatively high yield could give it some support.||59.94||-1.76||Industrials|
|CUV||Clinuvel Pharmaceuticals||Interesting skin disorder treatment developer that has done reasonably well over past year||53.50||-42.86||Health Care|
|EBT||eBet||Potential alternative to star performer Ainsworth Tech. Has exclusive deal with US poker machine maker WMS.||45.97||123.05||Consumer Discretionary|
|NTC||NetComm Wireless||Under appreciated small IT hardware maker that is punching above its weight. Hardly covered by press.||44.44||43.75||Information Technology|
|OTH||Onthehouse Holdings||Alternative small cap to online property leader REA Group. It is trying to use more timely housing data as a competitive edge against REA.||41.09||-35.06||Consumer Discretionary|
|PGC||Paragon Care||Emerging hospital equipment supplier that has been ignored by market.||22.73||-10.07||Health Care|
|Source: Eureka Report, Bloomberg|