If you are on the lookout for options on the small side of the market, then it could be worth considering the two small-cap ASX shares named below.
Thatâs because these small caps have been rated as buys with major upside potential by analysts at Bell Potter. Hereâs what you need to know about them:
4DMedical Ltd (ASX: 4DX)
The first small-cap ASX share that could be a buy according to Bell Potter is 4DMedical.
It is a global medical technology company that believes it has created a step change in the capacity to accurately and quickly understand the lung function of patients with respiratory diseases.
Bell Potter appears excited about the company’s prospects in the enormous United States market. It commented:
4DXâs recent capital raise was well supported by institutions and retail shareholders following a spate of news flow regarding commercialisation activities for the XV LVAS in the United States. This included the first commercial contract with the University of Miami and first scan completed at a Department of Veterans Affairs (VA) hospital.
[P]rogress with VA negotiations accelerated after the appointment of Dr David Shulken (former Secretary to the Department of VA) as an advisor to the company in April. With 3.5m veterans potentially eligible for screening to toxins from burn pit exposure, this opportunity continues to be the most lucrative. For the remainder of CY23 it is reasonable to expect the announcement of a pilot programme with at least one VA hospital. We also expect a second commercial contract in the private sector.
Bell Potter has a speculative buy rating and a $1.10 price target on its shares.
Catapult Group International Ltd (ASX: CAT)
Another small-cap ASX share that Bell Potter is a fan of is Catapult.
It is a global sports technology company that provides elite sporting organisations with real-time data and analytics to monitor and measure athletes. The broker commented:
Importantly the company has just turned EBITDA positive and said it will be free cash flow positive in FY24 (thus reducing or eliminating the need for an equity raise). We expect continued strong revenue growth in the core Wearables business in FY24 and also expect growth in the previously lagging Video business to significantly improve this year.
This suggests or implies a return to double digit revenue growth in FY24 and with a relatively stable fixed cost base, a reasonable portion of the additional revenue is expected to fall through to earnings.
Bell Potter has a speculative buy rating and a $1.20 price target on its shares.
