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3 small cap stars on the rise

James Mickleboro

The good news for investors that are interested in small cap shares is that I think there are some great options at the small end of the market right now.

Three that I believe investors should be taking a closer look at include:

ELMO Software Ltd (ASX: ELO)

I’ve been very impressed at the progress of this cloud-based talent management software solutions provider since listing on the Australian share market. Not only has the company smashed my expectations, it has smashed its prospectus forecasts. Unsurprisingly, this sent the ELMO share price surging higher. ELMO has opted to take advantage of this and recently raised $45 million from institutional investors which will be used to accelerate its growth. I believe that ELMO is well worth a closer look today.

Gentrack Group Ltd (ASX: GTK)

This billing software provider could be one of the best long-term investment options at the small-end of the market in my opinion. Gentrack provides its software to airports, water, and electricity companies, generating recurring revenues from annual fees, support services, and project services. Last month the company announced a new deal with E.ON, one of the world’s largest energy utility service providers. This new contract focuses on the delivery of its Velocity software to support E.ON’s energy supply business initially in the UK and Romania. I expect it could roll out across E.On’s entire operation eventually.

National Veterinary Care Ltd (ASX: NVL)

Another share which I think could be a great buy and hold small cap investment is National Veterinary Care. Thanks to a winning combination of organic and inorganic growth, the veterinary company reported a 27.6% increase in first-half revenue to $41.6 million and a 27.7% lift in half-year net profit after tax to $3.3 million in February. I expect more of the same in the second-half and beyond, especially given the growth through acquisition opportunities the company has in the highly fragmented veterinary industry.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended ELMOSFTWRE FPO. The Motley Fool Australia owns shares of NATVETCARE FPO. The Motley Fool Australia has recommended GENTRACK FPO NZ. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.