Buy Hold Sell: The hottest ASX small caps right now (and 2 on the rise)

Unless you've been living under a rock, chances are you're aware of the resurgence in small-cap stocks. The ASX Small Ordinaries is up 19% year-to-date, versus just 7% for the ASX 100.

But it's not just a rotation away from growth-starved large caps that is seeing smalls catch a bid. The recent reporting season showed that many small caps are in rude health, with strong balance sheets and improved earnings backed by margin expansion, built on a bedrock of innovation and competitive advantage.

That's the good news but, of course, not all small caps are created equal. Investors need to be highly selective when considering less mature businesses.

Against that backdrop, Livewire's Chris Conway sat down with James Nguyen from Tyndall and Shaun Weick from Wilson Asset Management to understand their most important factors when assessing companies and run the ruler over three of the hottest ASX small caps. 

For good measure, they each share a small-cap name they believe is on the rise. 

Please note that this episode was filmed 5 November 2025

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Edited Transcript

Chris Conway: Hello and welcome to Livewire's Buy Hold Sell. My name is Chris Conway. Momentum in small caps is heating up, and today, we're shining a light on some of the stocks leading the charge, as well as a couple more that might be on the rise. 

To help me do that, I'm joined by Shaun Weick from Wilson Asset Management and James Nguyen from Tyndall Asset Management. Gents, before we get into the stocks, I just wanted to ask, when you're scanning the small-cap universe, what factors are you most focused on? Shaun, I'll come to you first.

Shaun Weick: Yeah, for us, it's a lot of shoe leather actually, and a lot of Zoom calls. So, we often find that our best idea generation comes from actually meeting with the companies. Our process is very much focused on identifying undervalued growth companies where we can see a catalyst to rerate the share price, whether that be earnings upgrades, changes in management, divestments, M&A activities. So, we're out there daily just trying to scan and find ideas that way. And then ultimately, we think they're the factors that are going to drive reratings. We do have a strong focus on management teams. We think it is extremely important, particularly in the small end of the market. So, you can often follow the money and end up with good results.

Chris Conway: James, what about you? Factors that you look for?

James Nguyen: We look for similar factors, but I'd say the first and foremost front of mind is valuation. So, first thing we look at is we're trying to understand businesses where the market has mispriced, the current cashflow as well as future cash flow. And then after that, we're looking at the quality of the management, quality of the business model, and the quality of the balance sheet. One thing we probably don't look at that I know a lot of participants in the market look at is earnings momentum. And our view is that I'm happy to buy negative earnings momentum as long as I think the market has mispriced the trajectory of that earnings momentum.

Generation Development Group (ASX: GDG) 

Chris Conway: We'll get into some of the stocks now. We'll put the theory into practice. First up, Generation Development Group, GDG, financial services business providing life insurance and life investment products has had a ripping run. James, buy, hold, or sell for you.

James Nguyen (HOLD): Probably be a bit controversial here and it's a hard hold or a soft sell is my view. So, it's a business we love, right? And we love the business model. We love what they've done. We love what Grant has done. The execution has been nearly flawless. And we've owned it from mid-dollar and recently sold a couple of weeks ago at a bit over $7. And our view was that as well as they're executing, it's probably priced for perfection to a degree. It's trading on close to 70 times earnings. It's now trading on parity with a Hub and a 20% premium to Netwealth. And my simple view is that the Netwealth and Hubs of the world, where they are on the value chain from a tech stack perspective, they're probably a better quality business than the managed services account side of Generation Development.

So, investment is an opportunity cost game. And so, at the moment, we put our capital in Netwealth rather than Generation.

Chris Conway: Fair enough. Shaun, up 106% in the last 12 months. So, it has ripped pretty hard. Are you seeing any value there still? Buy, hold, or sell?

Shaun Weick (BUY): Yeah, don't let that scare you. We've been there since 60 cents. So, we're still a buy. We rate Grant Hackett management extremely highly there. The business has great leverage to water effectively strong structural trail wins across both their investment bonds and also their managed accounts business through Evidentia. The market was getting a little bit concerned around delays in the awarding of a large mandate within the Evidentia business. But yeah, the feedback that we're getting across the industry suggests that that's likely to land soon. And the delay is really driven by the fact that it's been upsized, the size of the mandate, which is actually a positive. So, the recent quarterly update demonstrated there's still really strong momentum in terms of flows. And then we just think the market's missing the opportunity within annuities. Super funds, this is an early-stage area that they're looking at, but we think they're close to signing their first super fund, which will effectively turn a low single-digit million loss into at least break-even.

And super funds tend to be those beasts that once won for the rest follow. So, yeah, we think there's some incremental earnings momentum to come through from there and we should place the business well from here and drive some earnings upgrades.

Cog Financial (ASX: COG) 

Chris Conway: Next up, we're going to talk Cog Financial, specialising in asset, finance, broking, commercial leases, et cetera. Shaun, I'll stay with you. Buy, hold, or sell?

Shaun Weick (BUY): Yeah, this one's a buy for us and it's a follow management story. Effectively, the guys from PSC Insurance that took that business effectively from 2015 at a dollar to the equivalent of $8 to last year when they divested the business to Ardonagh. So, they've come into this business, joined the board. We think there are really strong opportunities for this business to continue to grow its earnings at high single-digit to low double-digit, and then just continue to layer in acquisitions within that fleet management space where there's still a long tail of the market to be consolidated. Stock's on 13 and a half times earnings, growing above market. We think it looks really good here.

Chris Conway: Cog Financial, up 131%. So, better even than GDG, which we were just speaking about. James, seeing any value there still? Buy, hold, or sell?

James Nguyen (BUY): Absolutely a buy. I share a lot of Shaun's comments and agree with a lot of his comments. And I'd just say that the time that Tony's been in the seat at Cog, the speed that they're executing their strategy has been phenomenal. So, they've already made a couple of highly accretive acquisitions. The market's only now beginning to reward them for that. So, absolutely buy.

Chris Conway: There you go, double buy, ladies and gentlemen, for those playing at home. 

Netwealth (ASX: NWL) 

Chris Conway: Finally, in the space, we're going to talk about another financial services business. You'd think that small caps were only made up of financials, but it's Netwealth. So, we'll round it out for this segment, platform business for managing investments, superannuation, et cetera. James, I'll stay with you. Buy, hold, or sell?

James Nguyen (BUY): A very recent play for us. So, we bought it post the First Guardian issues. If I look at the business itself, it's exposed to the structural growth within platforms and the movement away from aligned bank platforms into independent platforms. But the opportunity really arose because of the First Guardian. So, those that don't follow the story, they're the platform provider for a managed scheme that has fallen over. We've seen the ramifications with Macquarie paying out investors. So, our view is though, if you look at the share price of Netwealth, it's down 20% since that time, while it's closest comparable with Hub, which is up 5%. So, what we've seen is about $1.5 billion of market cap has been destroyed. For ultimately worst case scenario, $100 million exposure. So, they've got the balance sheet to handle that. That's less than a year's worth of after tax profits.

And so, it's a business that can more than handle, I think, a worst-case scenario, as well. If you look at Macquarie's reaction to its exposure, Macquarie's increased the very blunt instrument, but they've increased the FUM of the managers that they will put on their platform. And what that means is that they've squeezed out a lot of high-quality managers. They've annoyed a lot of financial advisors, and who's going to be the beneficiary of that? It's going to be Netwealth and Hub.

Chris Conway: Makes sense.

James Nguyen: So, my view is over time, once they move beyond First Guardian and manage that, that the discount between a Netwealth and Hub will close.

Chris Conway: Shaun, up 9% over the last year. So, hasn't been as scintillating as the other two. Buy, hold, or sell for you?

Shaun Weick (HOLD): Yeah, it's a hold for us. We're just purely on a relative basis. We own Hub and the business, it's a fantastic business, Netwealth. Management are excellent. They've done a great job in terms of capitalising on those tailwinds. But yeah, we do think the First Guardian Shield estimates are a bit of an overhang. There are some potential risk around what that means from a flow perspective in the near term. Hub, we think, is just maintaining very strong flow momentum. And we've actually got some AMP, as well, which we think is a beneficiary of this trend, too. So, yeah, it's a hold for us on a relative basis.

Guest picks

Chris Conway: We'll move out of the financial space. I've asked the gents to bring along a company that they think can do very well over the next 12 to 24 months, a bright future ahead basically provided they can execute. So, Shaun, I'll stay with you. What have you got for us?

Artrya (ASX: AYA) 

Shaun Weick: Yeah, so my stock is Artrya. This is effectively a software-as-a-service product that specialises in providing AI, which is used to scan the heart and identify and detect coronary artery issues effectively. And they've recently received FDA approval for their plaque scanning product, and they're on track to receive FDA approval for their flow scanning product in 1Q calendar year '26. They've got really strong validation in the field already. Three of the top 10 hospital systems in the US have signed up for the SAPPHIRE study. We believe there's a strong pipeline sitting behind that, the course of the rest of this calendar year, that will sign up. And in effect, we believe this is the next Pro Medicus of MedTech here in Australia. And yeah, the upside potential here is significant. The TAM's about five billion. The market cap today is 500 million, and its closest competitor, which has an inferior product in the US called Heartflow, is a US$3 billion company.

So, we think if this company can successfully execute over the next 12 to 24 months, this could be a 5X-plus type story, so we really like this one.

Chris Conway: I must say when you were talking about getting into the US hospitals, I immediately thought Pro Medicus. Once you get a few of them, then the dominos fall and they all adopt it.

Shaun Weick: The domino falls, the gold plate. Yeah.

Chris Conway: Good stuff. James, what about you? What's one that you think is on the rise?

Scidev (ASX: SDV) 

James Nguyen: Okay. So, shorthand me at Pro Medicus. The one that I'm really excited about, it's actually the smallest market cap company in our portfolio is a company called Scidev. So, Scidev, its core business is providing IP in terms of water treatment for heavy industries, so that they leave a lower environmental footprint. So, its major product is a product called CatChek, which is basically chemicals for the US shale industry. And so, what it does is that it reduces the friction when you're extracting shale oil. And what that means is that you extract oil more efficiently, but it also extends the life of the well. They've been able to, last year, deliver 40% revenue growth in an environment where shale oil has been flat. So, they've been able to take material market share. What excites me is the fact that they're 8% of market share in the Eagle Ford area or the Eagle Ford Basin, and they're only just entering the much larger Permian basin, where they're only 1%.

So, the runway for growth there is immense, but that's not actually the reason why I get excited about Scidev. The reason why I get excited about Scidev is they've got a business that treats PFAS. So, for people who don't know what PFAS is, PFAS is a forever chemical that's really infiltrated a lot of the soil, a lot of the drinking water that we have. We've seen the harms of PFAS and the ramifications where 3M has settled with a lot of the drinking water utilities in the US for over $10 billion. Yeah, this is a market that estimates that'll be 300 to 400 billion just to remediate PFAS in the US, let alone in Europe. This company, a little company in Australia, with an 80 million market cap, has the best technology to address the PFAS issue. So, in Australia, they've treated two billion litres of drinking water.

In the US, they've only just won their first contract to treat three contaminated defence sites. And if they can prove that their technology works, my view is that there's a massive runway for them. At the moment, you're paying six times EBITDA for their core business, but if they can execute on the PFAS, I genuinely believe this is a 10-bagger.

Chris Conway: There you go. A couple of very exciting picks, ladies and gentlemen, just quietly, I think I'm going to add them to my watch list, as well. If you enjoyed this episode, make sure to give it a like and don't forget to follow our YouTube channel, we release lots of great content every single week.