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It’s fair to say that investing in the small side of the share market carries more risk than other areas.
However, if your risk tolerance allows for it, having a bit of exposure to this side of the market could be a good thing for a balanced portfolio due to the potential returns on offer.
After all, if you can find a future mid or large cap whilst it is still a small cap, the returns could be incredible.
With that in mind, listed below are two small cap ASX shares that have been tipped as buys. They are as follows:
Hipages Group Holdings Ltd (ASX: HPG)
The first ASX small cap share to look at is Hipages. It is a leading online platform and software as a service (SaaS) provider that connects consumers with trusted tradies.
The Hipages platform helps tradies grow their business by providing job leads from homeowners and organisations looking for qualified professionals.
Goldman Sachs is a very big fan of Hipages and believes “HPG presents a compelling long term growth opportunity as it scales to become the leading trade services marketplace in Australia.”
The broker currently has a buy rating and $2.20 price target on its shares.
Another small cap ASX share that has been tipped as a buy is Silk Laser.
It is one of Australia’s largest specialist clinic networks. Silk offers a range of nonsurgical aesthetic products and services including laser hair removal, cosmetic injectables, skin treatments, body contouring, and skincare products.
Demand for Silk’s services has been strong in recent years and continued in FY 2022. This and recent acquisitions helped the company deliver a 91% increase in sales to $162.7 million.
Pleasingly, management remains positive on the future and “expects to continue its growth trajectory in FY23.”
This went down well with the team at Wilsons. In response to its results, the broker has put an overweight rating and $3.62 price target on the company’s shares.