3 small cap ASX shares I’d buy with $3,000 right now Tristan...

3 small cap ASX shares I’d buy with $3,000 right now

Tristan Harrison | September 10, 2020 5:30pm

Share 1: Bubs Australia Ltd (ASX: BUB)

Bubs is a rapidly-growing infant formula business which specialises in goat milk products.

The Bubs share price has drifted lower by 15.5% since 24 August 2020 to $0.82. Since then it released its FY20 result and also announced a capital raising.

I thought the FY20 result was quite impressive. Full year revenue was up 32% to $62 million, infant formula revenue grew 58% to $30 million. The ASX share showed that Chinese revenue grew 32% to $13 million and export revenue outside of China increased by five-fold. That ex-China export revenue represented 10% of group revenue.

The normalised gross profit margin increased from 21% to 24% and it is going for a locally-produced manufacturing option (with Bubs’ ingredients) in China with joint venture partner Beingmate. Part of the capital raising money will be used to buy a stake in the Chinese manufacturing facility.

Bubs has a lot going on, I can understand the market uncertainty. But there are plenty of positives. It’s launching new products, including a vitamin and mineral range. It now has a global brand ambassador. It’s growing in multiple markets.

I’d be happy to buy a parcel of Bubs shares at the current share price.


https://www.**promotion blocked**.au/2020/09/10/3-small-cap-asx-shares-id-buy-with-3000-right-now/