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4 small-cap stocks I’d buy to hold for the next 10 years

The London stock market is packed with terrific small-cap stocks. Here are four I’d buy for my own portfolio when I have spare cash to invest.


The British tech sector has tonnes of investment potential as the world becomes increasingly digitalised.

One hot growth trend of the next decade is the emergence of hybrid and remote working. An AT&T study suggests that 81% of workplaces will prioritise hybrid working by 2024. That’s up from 42% last year.

I’d buy shares in small-cap share Redcentric to capitalise on this booming market. This company provides a range of cloud, communications and security-based services to businesses. Latest results showed revenues soar 38.8% between April and September, to £61.5m.

I’d buy Redcentric even though it lacks the colossal R&D and marketing budgets of big industry beasts like IBM and Microsoft.

Atlantic Lithium

The electric vehicle (EV) industry is also tipped for staggering growth over the long term. Bloomberg analysis suggests there will be 66m of these low-emissions vehicles on the road by 2040. That’s up from just 3m in 2020.

Atlantic Lithium could be a lucrative way to capitalise on this market. That’s because the material it specialises in is a critical component in the batteries that make EVs run.

I like this particular lithium stock due to the quality of its Ewooya asset in Ghana. Drilling here continues to impress and last month said that fresh testing revealed the highest mineral grades to date.

I’d buy it despite the threat of development problems at Ewooya. These could have significant impact upon eventual earnings.

Facilities by ADF

Small-cap Facilities by ADF plays a critical role in bringing your favourite movies and TV shows to life. It supplies mobile make-up studios, production offices, catering vans and other vehicles that allow actors and production staff do their jobs.

The UK is becoming an increasingly popular destination for television and film production, creating exceptional revenues opportunities for the firm. And this month ADF made the transformative acquisition of equipment supplier Location One to enhance earnings growth.

ADF says the move will boost its plans of becoming “a one-stop-shop” to the television industry. Tough economic conditions pose a threat to production budgets in the near term. But I’d still buy this penny stock.

Zoo Digital Group

Sticking with the media theme, I think Zoo Digital will thrive as TV and film studios globalise their product. It is particularly well-placed to exploit the steady growth in streaming services (some of the company’s major customers include Netflix, Amazon and Disney).

The business adds subtitles, dubbing and voiceovers to make programming accessible to viewers around the world. It also provides other essential services like ensuring content is compliant across different regions.

The company sources 90% of revenues from overseas. This leaves profits vulnerable to exchange rate fluctuations. But I still think it’s an exciting small-cap to buy today.

Turnover at Zoo soared 91% between April and September, to $51.4m. It has a strong order book and continues investing heavily in R&D to keep revenues rolling in.

The post 4 small-cap stocks I’d buy to hold for the next 10 years appeared first on The Motley Fool UK.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended and Microsoft. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2022