Brokers tip huge returns for these exciting small cap ASX shares

At the small end of the Australian share market, there are a number of companies with the potential to grow materially in the future.

Two such small-cap ASX shares that brokers are very positive on and rate as buys are listed below. Here’s what you need to know about them:

Cosol Ltd (ASX: COS)

COSOL could be a small-cap ASX share to buy according to analysts at Bell Potter.

It specialises in digital IT solutions, with a focus on enterprise asset management software platforms and data management. Its solutions optimise operations in asset-intensive industries, including natural resources, energy and water utilities, defence and public infrastructure.

Bell Potter believes there’s a lot to like about COSOL. It explains:

The information presented highlights the compelling value proposition of COSOL in the Enterprise Asset Management (EAM) Industry, with strong financial growth, a diverse client base, strategic partnerships, and actively supports its clients’ sustainability goals , COSOL demonstrates its ability to deliver innovative solutions and drive industry-wide transformation. The company’s ownership alignment, international expansion, and scalable business model positions it well as a leader in the market. As the EAM software market continues to grow, COSOL’s suite of digital technology solutions and forward-thinking approach position it well for future success.

The broker initiated coverage on COSOL earlier this week with a buy rating and a $1 price target. This is 43% higher than where its shares currently trade.

Strandline Resources Ltd (ASX: STA)

Morgans is a fan of this small-cap ASX mining share. The broker feels it offers investors a rare investment proposition that shouldn’t be missed. Its analysts explain:

STA is a heavy mineral sands explorer and developer, with projects in Australia and Tanzania. We continue to note that STA is a rare investment proposition. It enjoys: 1) 100% ownership of a world-scale/ strategic asset in a tier 1 jurisdiction; 2) lenient debt terms; 3) visibility on upcoming cashflow/ de-risking; 4) proven, backable management; 5) a reputable board; and 6) clear M&A appeal while trading at a material discount.

Morgans has a 70 cents price target on the company’s shares. This is more than double where its shares currently trade.