The PlaySide Studios Ltd (ASX: PLY) share price is having a very strong day on Tuesday.

In morning trade, the game developer's shares are up 14% to 68 cents.

At one stage, the PlaySide share price was up as much as 28% to 76 cents.

Why is the PlaySide share price rocketing higher?

Investors have been scrambling to buy PlaySide shares today after the company announced an agreement with Facebook and Instagram owner Meta Platforms (NASDAQ: META).

According to the release, following a successful concept pitch, Meta has engaged PlaySide to design, develop, and create a mixed reality interactive software product to be playable on its Quest suite of virtual reality devices.

What are the terms?

PlaySide notes that it will receive payments for the development of the game and will also receive a share of net revenues from the game in perpetuity.

The development payments will be received at agreed milestones, which are consistent with industry benchmark requirements for progressing the game to launch. The agreement is effective immediately and work on the title is expected to commence in the current financial year.

PlaySide's CEO, Gerry Sakkas, commented:

This deal marks the next evolution of our work in the studio, as we leverage our abilities to conceptualise and develop exciting games in a revenue-share arrangement with a leading global technology company. Meta is bringing virtual reality and mixed reality into the mainstream with its Quest suite of products, and we are excited about the opportunity to demonstrate our domain expertise with this game.

Meta will no doubt be hoping that this game gives its often ridiculed Metaverse platform a much-needed boost. Maybe legs will be included this time!

The post Guess which ASX gaming share is surging 28% on a deal with Meta? appeared first on The Motley Fool Australia.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a strong gain. At the time of writing, the benchmark index is up 1.5% to 6,778.4 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are dropping:

Austal Ltd (ASX: ASB)

The Austal share price is down 6% to $2.26. This is despite there being no news out of the shipbuilder on Monday. However, in recent news, last week, the company was ordered to pay a $0.65 million penalty for a disclosure breach.

New Hope Corporation Limited (ASX: NHC)

The New Hope share price is down 5% to $7.06. The catalyst for this has been the coal miner's shares trading ex-dividend this morning for its latest dividend. Thanks to sky high coal prices, last month the company was able to declare a mammoth fully franked final dividend of 56 cents per share. This was the equivalent of a fully franked 7.3% dividend yield at Friday's close price. Eligible shareholders can look forward to receiving this dividend on 8 November.

Playside Studios Ltd (ASX: PLY)

The Playside share price is down 2.5% to 60 cents. This morning the video game developer released its first quarter update and revealed a modest 6.5% quarter on quarter increase in revenue to $6.5 million. This wasn't enough to cover its operating costs, leading to an operating cash outflow of $0.85 million.

South32 Ltd (ASX: S32)

The South32 share price is down 2% to $3.64. This follows the release of a mixed quarterly update from the mining giant this morning. South32's production during the quarter was a little hit and miss. One of the disappointments was its met coal production, which fell short of expectations and has forced a reduction in its full year production guidance.

The post Why Austal, New Hope, Playside, and South32 shares are dropping appeared first on The Motley Fool Australia.

It's been a rough year for investors of small-cap ASX shares.

"All types of investing require nerve and courage. But perhaps none more so than small-cap stocks," said Ophir analysts in a memo to investors this month.

"When an economic downturn hits, small caps tend to fall first and farthest."

In volatile and uncertain times, the value of smaller companies sinks much more dramatically than larger companies for multiple reasons.

"Small caps also tend to be more sensitive to changes in the economy. They are less able to diversify their operations and are less likely to have the large cash reserves needed to withstand difficult trading conditions."

They can also get caught up in a liquidity spiral. In a falling market, institutional investors often sell out of smaller holdings first to avoid getting trapped in an illiquid position.

"They then also stop buying, pushing prices down further and faster on even lower levels of liquidity," read Ophir's investment strategy memo.

"And while small-cap managers might see even cheaper stocks, many are unwilling to enter the market so prices in small-cap stocks keep falling at a faster rate."

But the reward for hanging onto the small fish is that, on the other side, they rally much faster than large caps.

"Historically, in the 12 months after the US small-cap index has bottomed around a recession, they have returned an incredible 70% on average – that's 11% higher than large caps," read the Ophir memo. 

"The small-cap rebound is also quick. Most of the additional return benefit versus large caps has happened in the first three months."

So remembering this, here are three small-cap ASX shares that the Cyan C3G Fund is holding onto despite being absolutely hammered last month:

Rock solid investments for the inevitable small-cap recovery

The Mighty Craft Ltd (ASX: MCL) share price tumbled more than 21% in September, but the Cyan team is not worried.

"The alcohol industry globally is dominated by a handful of powerful players, but the domestic industry has been growing strongly in recent years," read Cyan's memo to clients.

"We think it's a sector worth being exposed to and Mighty Craft is our preferred business model, whereby they acquire and accelerate growing beer and spirits brands through provision of capital, distribution and retail and wholesale points of presence."

The nature of the industry means Mighty Craft could become an attractive takeover target.

"Inevitably the successful domestic businesses or alcohol brands are acquired as they obtain, or are on a clear path to obtaining, reasonable market share."

Melbourne video games developer Playside Studios Ltd (ASX: PLY) is another small-cap Cyan analysts are backing, despite a 14.3% drop in valuation last month.

"This gaming business continues to impress with the execution of its growth strategy through a business model based on work-for-hire, original IP development and new initiatives like a third party publishing division," read the memo from Cyan.

"In short, an exceptional team with a strong and growing business in a strong and growing industry."

The heavy discounting in its shares means it's another potential takeover subject.

"We believe Playside can deliver great returns to shareholders independently or as an M&A target in time (hopefully both)," said the Cyan portfolio managers. 

"We see this as a unique opportunity to get exposure to these dynamics in the ASX listed space."

The Cyan team has been a longtime fan of hospital software maker Alcidion Group Ltd (ASX: ALC).

And that hasn't changed despite a 12.1% drop in share price in September.

"Alcidion is building a strong position in the digitisation of hospital management systems, both administrative and clinical, in Australia and the much larger UK market."

The business raked in $34 million in revenue for the 2022 financial year. Its June quarter revenue was 46% up year on year.

"The company has worked hard to become one of the leading providers and the timing looks perfect to scale the business significantly over the next two years as governments drive the push towards technology in healthcare in a post-COVID environment."

The post 3 battered small-cap ASX shares we're still backing: expert appeared first on The Motley Fool Australia.

It has been a tough year for small cap investors, with the S&P/ASX Small Ordinaries Index (ASX: XSO) down 23% over the past 12 months.

That fall, as painful as it is, has been cushioned by the epic performance of a handful of large  commodity stocks, including the Core Lithium Ltd (ASX: CXO) share price surging 177% higher, the New Hope Corporation Limited (ASX: NHC) share price roaring 157% higher, and the Lake Resources N.L. (ASX: LKE) share price jumping 89% higher in the past year.

How New Hope shares – with its $5.7 billion market capitalisation – are included in the Small Ordinaries Index and are one of life's mysteries. Also a constituent of the S&P/ASX 200 Index (ASX: XJO), New Hope is around the 80th largest ASX-quoted company in the country.

Moving on…

Writing in its September monthly update, the Cyan C3G Fund notes the ongoing severe volatility in global markets, with the US stock market having now experienced its worst first nine months of a calendar year in 20 years.

If your portfolio is hurting, like mine, you'll know why. 

It's even worse if you don't hold any of the hot lithium and coal stocks, like me, and the Cyan C3G Fund. Or you do hold some of the many big losers over the past 12 months, like the Aussie Broadband Ltd (ASX: ABB) share price slumping 59% or the Pinnacle Investment Management Group Ltd (ASX: PNI) share price falling 41%, like me.

Cyan C3G Fund portfolio managers Graeme Carson and Dean Fergie say "the Australian economy appears to be in a stronger position than some of its counterparts, but the financial markets aren't yet reflecting this."

That's certainly the case in the small-cap space, with the share prices of many companies down 60% or more despite some of them growing quickly, having good balance sheets with no debt, and being cash generative.

Or perhaps I'm just bemoaning the performance of the small and micro cap stocks in my portfolio…

Here's when stock markets could start to move higher…

Looking for a silver lining amongst these cloudiest of times, the Cyan C3G portfolio managers say that with the market already pricing in an upcoming economic slowdown, the hope is "financial markets will front-run the recovery just as they did the downturn… as they have with all bull and bear market cycles in the past."

As for the timing, as ever, no-one knows when markets will turn. That said, it may be sooner rather than later.

Cyan C3G believes "the most-likely first positive catalyst for a stock market recovery will be a line of sight as to when the interest rate hike cycle will end." The portfolio managers go on to say it is expected the US will end its cycle in the first quarter of calendar 2023, with Australia perhaps being a month or two earlier.

That's not too far away, and markets, being forward-looking beasts, could move higher before then. 

If I was taking a guess – and it's nothing more than a guess – I reckon the stock market could be in for a big January as the so-called January Effect kicks into high gear.

As bottom-up stock pickers, the Cyan C3G portfolio managers are confident the companies in their portfolio will have materially stronger market share positions in their industry in years to come, irrespective of economic conditions.

The September monthly update outlines the investment rationale for some of the Cyan C3G key portfolio positions including…

Alcidion Group Ltd (ASX: ALC), a company building a strong position in the digitisation of hospital management systems, both administrative and clinical, in Australia and the much larger UK market. The Alcidion share price is down almost 60% over the past 12 months, yet Cyan say "the timing looks perfect to scale the business significantly over the next 2 years as governments drive the push towards technology in healthcare in a post-Covid environment."

Playside Studios Ltd (ASX: PLY) is an independent video game developer with "a business model based on work-for-hire, original IP development and new initiatives like a 3rd party publishing division," according to Cyan C3G. The Playside share price fell 25% in September, yet the fund managers believe the company "can deliver great returns to shareholders independently or as an M&A target in time (hopefully both). We see this as a unique opportunity to get exposure to these dynamics in the ASX listed space."

The post Top fund manager thinks ASX could start to move decisively higher, potentially sooner than you might be expecting appeared first on The Motley Fool Australia.

Here's why experts think these ASX shares could be top options for investors right now:

Nitro Software Ltd (ASX: NTO)

The first small cap that experts rate highly is Nitro Software.

It is a document productivity software company that is aiming to drive digital transformation in organisations around the world. Nitro is doing this with its Nitro Productivity Suite, which provides businesses of all sizes with integrated PDF productivity and electronic signature tools.

And while the company has been growing at a rapid rate in recent years, it is still only scratching the surface of its enormous market opportunity. Management commented:

With a strong balance sheet and zero debt, we are well placed to cement and expand our position in the fast-growing US$28 billion eSigning and PDF productivity market as customers increasingly demand the suite of high-security high-trust products we offer.

Goldman Sachs is very positive on the company and currently has a buy rating and $2.05 price target on its shares.

PlaySide Studios Limited (ASX: PLY)

Another small cap ASX share that experts are tipping as a buy is PlaySide Studios.

It is one of the largest video game developers in the ANZ region. It provides titles in a range of categories, including self-published games based on original intellectual property and game development services in collaboration with studios such as Take-Two Interactive, Activision Blizzard, Meta, Disney, Pixar, Warner Bros, and Nickelodeon.

The company also has a growing interest in NFTs and generated $9 million in sales from them during the first half.

Ord Minnett is a fan of the company. It currently has a speculative buy rating and 85 cents price target on its shares.

The post Experts say these small cap ASX shares are buys appeared first on The Motley Fool Australia.

Here's why they could be worth considering:

Airtasker Ltd (ASX: ART)

The first small cap ASX share that has been tipped as a buy is Airtasker. It is Australia's leading online marketplace for local services, connecting people and businesses who need work done with people who want to work. Since launching in 2012, Airtasker highlights that it has enabled more than $2 billion in working opportunities and served more than 1.3 million unique paying customers across the world. But the company is only getting started. It estimates that it has a total addressable market of $600 billion across Australia, the UK, and the US.

Morgans is a fan and sees huge upside for Airtasker's shares. It currently has an add rating and $1.05 price target on them.

PlaySide Studios Limited (ASX: PLY)

Another small cap ASX share to look at is PlaySide Studios. It is one of the largest video game developers in Australia. It has a growing portfolio of its own titles and a number of work for hire deals with major publishers such as 2K Games and Activision Blizzard. The latter appears to demonstrate its growing reputation in the industry.

Ord Minnett currently has a speculative buy rating and 85 cents price target on its shares.

Serko Ltd (ASX: SKO)

A final small cap that could be a buy is online travel booking and expense management provider, Serko. It is the company behind the Zeno Travel and Zeno Expense platforms. The Zeno Travel platform provides AI-powered end-to-end travel itineraries, cost control, and travel policy compliance to corporate customers. Whereas the Zeno Expense platform allows businesses to automate and streamline their expense administration function, identify out-of-policy expense claims, and prevent fraud. The company also has a deal with travel giant Booking.com which is expected to drive significant growth in the coming years.

Citi is a fan of Serko and has a buy rating and $5.10 price target on the company's shares.

The post Here are 3 exciting small cap ASX shares analysts are tipping for big things appeared first on The Motley Fool Australia.

But if your tolerance for risk allows for it, having a bit of exposure to this side of the market could be a boost for a balanced portfolio.

This is due to the potential returns on offer from promising small caps. If you can catch a small cap before it becomes a mid cap or even a large cap, the returns could be sensational.

With that in mind, here are two small cap ASX shares that analysts rate highly:

Airtasker Ltd (ASX: ART)

The first small cap ASX share that has been named as a buy is Airtasker.

It is growing online marketplace for local services with an estimated total addressable market of $600 billion across Australia, the UK, and the US.

Morgans is a big fan of the company. This is due to this significant market opportunity and its attractive business model. The broker also highlights that the company is operating in a market that is in the early stages of ecommerce adoption. It feels this puts Airtasker in a great position to benefit as the shift accelerates.

At the end of July, the broker retained its add rating with a trimmed price target of $1.25. This is more than double the current Airtasker share price.

PlaySide Studios Limited (ASX: PLY)

Another small cap ASX share that has been tipped as a buy is PlaySide Studios.

It is one of the largest video game developers in the ANZ region. Playside has developed a portfolio of games independently and in collaboration with studios such as Disney, Pixar, Warner Bros, and Nickelodeon.

In addition, over the last couple of years, the company has signed a number of work for hire deals with games publishing giants including 2K Games and Activision Blizzard. This could see the company work on some major titles for these gaming giants, which has the potential to give its reputation a huge boost and support further work for hire contract wins.

Last week, analysts at Ord Minnett retained their speculative buy rating and 85 cents price target. Based on the latest Playside share price of 67.5 cents, this implies potential upside of 26% for investors.

The post 2 small cap ASX shares that analysts rate as buys appeared first on The Motley Fool Australia.

ASX growth shares have made something of a comeback in the past couple of months.

But many experts are still warning investors to buy those companies with solid numbers behind them rather than speculative pre-revenue businesses. 

With this in mind, here are a couple of ASX shares that Cyan Investment Management holds that are growing spectacularly:

Melbourne games studio keeps churning out the hits

Cyan has been a longtime fan of electronic games developer Playside Studios Ltd (ASX: PLY).

After seeing the share price freefall 60% from February to June, the fund was pleased to finally see the unaudited full-year results last month.

"In FY22, Playside grew revenues 169% to $29 million, expanded its team considerably and has a spate of exciting game releases and milestones across FY23," said the Cyan portfolio managers in a memo to clients this week.

"And, importantly, has a very strong balance sheet backed by almost $38 million in net cash."

The ASX tech share has risen a stunning 54% since the June trough. But even after that, cash forms 33% of its market capitalisation.

"The business continues to expand with a newly formed publishing division announced in late July."

While the Melbourne company is not widely covered, both analysts surveyed on CMC Markets currently recommend Playside shares as a strong buy.

Cashing in on big-name clients jumping on a structural trend

Marketing technology provider XPON Technologies Group Ltd (ASX: XPN) is not exactly a household name yet.

But Cyan portfolio managers Dean Fergie and Graeme Carson are confident that it is serving in a space exactly where the business world is heading.

"We see this marketing technology business as a great way to gain exposure to the structural shift towards a requirement for businesses to build first-party (company-owned) data for digital marketing," read their memo.

"The material move away from personal privacy threats such as website tracking 3rd party cookies continues to accelerate as Microsoft Corporation, Google and Apple Inc — along with independent providers like Brave, Firefox and Opera — tighten their browser security systems."

Similar to Playside, Xpon shares halved in value this year until its June trough. Last month, Cyan welcomed its fourth-quarter financials.

"The most recent quarterly cash flow statement confirmed our confidence showing revenue growth of 134% year-on-year."

The Xpon share price has rocketed 55% since June.

The company only listed in December, which was, in retrospect, terrible timing for a high-growth tech stock.

The Cyan team reckons it can only look upwards and onwards from here, armed with a stable of big-name clients.

"Xpon already delivers ARR [annualised recurring revenue] of $16 million (+78% YoY) and expects significant organic growth going forward," read the memo.

"A relative newcomer to the ASX, we expect it to garner [the] attention of investors as revenue builds and new clients are signed up, adding to existing enterprise clients such as Domino's Pizza Enterprises Ltd (ASX: DMP), Flight Centre Travel Group Ltd (ASX: FLT) and Super Retail Group Ltd (ASX: SUL)."

The post Revenue up 169%: 2 ASX tech shares showing explosive growth appeared first on The Motley Fool Australia.

Ask A Fund Manager

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Cyan Investment Management portfolio manager Dean Fergie reveals what he would do with three ASX shares that have lost half their value in 2022.

Cut or keep?

The Motley Fool: Now let's talk about three ASX shares that have seen their prices plummet in recent times.

What would you do with Playside Studios Ltd (ASX: PLY), which you've previously discussed with us. How do you feel about it these days? The share price has halved this year.

Dean Fergie: Look, Playside, I think it got pretty hyped up. They did a game called Dumb Ways to Die and released a bunch of NFTs on the back of it. So the characters within the game are called Beans, and they released 2,000 Beans. And they made, within a month, something like $7 or $8 million by selling the NFTs. Now, I don't have to tell anyone that the whole cryptocurrency and NFTs are not the flavour of the month anymore. So I think some of the hype that was in Playside has dissipated. 

However, in the last month they've signed an extended agreement with Facebook and Meta Platforms Inc (NASDAQ: META) to do more gaming development for them. They've got a couple of big games that they're about to release. So, for us, we think it's an A-grade gaming developer on a global stage, which is a small company based in Australia. 

And we think there's clearly been quite a bit of corporate activity in terms of Microsoft Corporation (NASDAQ: MSFT) buying Activision Blizzard last year. So for us a business like Playside, that's doing its own IP [intellectual property] in terms of gaming but also gaming development for some of the biggest gaming companies around the globe, is a great long-term investment.

MF: And for such a small company, it's profitable, isn't it? That's handy.

DF: That's right. Really, really strong growing revenues, but a nice blend of its own IP in terms of games, but also work for hire for some of the really, really big companies around town. So we think it's a great medium-term story.

MF: Great. So it sounds like you still have your holdings and are happy to hold onto them.

DF: Yeah. What's been really interesting about all of our holdings that have fallen pretty substantially over the last six months is that the news they've released has been, by and large, really, really positive. 

It's not like they've come out with strong earnings downgrades, that they've had debt covenants flow and all these things, haven't lost customers. Across the board, the news flow has been really positive, which has been in stark contrast to the movement in share prices.

MF: The next one is one that I don't think your fund has ever held — a software company called Whispir Ltd (ASX: WSP), which has also halved so far this year.

DF: This was one of these businesses that when it IPOed, we probably thought it was a little bit toppy in terms of its valuation. Maybe we were correct for a while. I think it maybe floated at around $1.50 and then went up to $4, and it's come back to a dollar or so.

This is one of these businesses that has got a really, really strong corporate client base, which is positive, [and] really, really strong growth in revenues. But, unfortunately, it's still running a pretty high cost base. So it still isn't profitable. Even though, from my memory, they said at the IPO they would be profitable in the next year, which they haven't been. And I would say right now, if any business should be cutting costs, it would be right now.

I think it's got a market cap of around $130 million and something like $30 million on its balance sheet. I think this is one of these businesses, it's probably worth investors having a closer look at, because they've got a good commercialised messaging product with Bluetooth clients, a strong balance sheet, growing revenues. They just need to dial back their costs and it could actually be quite a good business.

MF: So next month's results season will be pretty interesting for Whispir, won't it?

DF: Yeah. I think these businesses they've just got to stop burning cash. This is not a market where you can raise money easily, or if you want to raise money, it's going to be expensive because your share prices are so trash. 

So it's certainly one that if they start making the right noises, then I'd consider adding it to my portfolio.

MF: And the third one is Maggie Beer Holdings Ltd (ASX: MBH), which has halved since February. It's another one that you've discussed in the past. I wonder how you feel about it at this moment?

DF: Yeah… we've recently sold it. Their dairy assets, they're trying to sell them, but they haven't sold them yet. I think there's some challenges in terms of getting a decent price for them. 

But Maggie Beer products I think are selling quite well. The Hampers Emporium business, the online business that they bought a couple of years ago, is a good business, but I think it was a real COVID play.

You've seen it across the board with Adore Beauty Group Ltd (ASX: ABY), Temple & Webster Group Ltd (ASX: TPW), Kogan.com Ltd (ASX: KGN), and the like, all these online businesses had a great [few years]. 

As everyone gets back to normal, they're more likely to spend money going on an overseas holiday or interstate rather than sending a hamper to their friends. So I think there's some pressure there. 

Plus, on the cost side, in terms of packaging, logistics, transport, and the like, these businesses, their margins are going to come under pressure. And when you don't have an enthusiastic client base, I think their margins are going to continue to get squeezed in the medium term.

MF: Did you end up selling at a loss or a gain?

DF: We held it for quite a long period of time. Let me just have a look. We might have been close to square. Maybe a moderate profit. 

We would have done really nice if we'd sold at 50 or 60 cents, but we sold it in the high 30s, low 40s, having bought it a couple of years previously. So it wasn't as good as we thought it would have been. 

The post 'Great long-term investment': Expert names small-cap ASX share to buy for cheap appeared first on The Motley Fool Australia.

Three ASX shares brokers have named as buys this week are listed below. Here's why they are bullish on them:

Allkem Ltd (ASX: AKE)

According to a note out of Morgans, its analysts have retained their add rating but trimmed their price target on this lithium miner's shares to $16.38. This follows the release of an update out of Allkem which revealed stronger pricing for its lithium carbonate but softer production for its spodumene operations. Overall, while this was a mixed update, the broker remains positive on Allkem, particularly given management's production growth plans. The Allkem share price is trading at $11.63 today.

CSL Limited (ASX: CSL)

A note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $310.00 price target on this biotherapeutics company's shares. Morgan Stanley notes that updates from some of CSL's peers have painted a favourable picture for industry trading conditions. In addition, the broker is pleased with the progress the company is making with its collection centre rollout. The CSL share price is fetching $270.90 on Wednesday.

Playside Studios Ltd (ASX: PLY)

Analysts at Ord Minnett have retained their speculative buy rating and 95 cents price target on this games developer's shares. This follows news that the company has signed a new work for hire deal with tech giant Meta Platforms (Facebook) with a focus on virtual reality and the metaverse. The broker feels this further demonstrates the quality of the company's studio. The Playside share price is trading at 70 cents on Wednesday.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

The PlaySide Studios Ltd (ASX: PLY) share price is in the spotlight this morning amid its latest announcement.

Shares in the Australian game developer are sparkling a little brighter today, leaping 11.11% shortly after open on Monday.

They have since retreated — at the time of writing, PlaySide Studios shares are up 6.94% at 77 cents. Shareholders are receiving the much-needed boost following the company's work-for-hire extension with social media and virtual reality juggernaut Meta Platforms Inc (NASDAQ: FB).

What does it mean for the ASX-listed company?

More work with Meta is on the horizon

Investors are doing a double-take of PlaySide Studios today as it deepens its relationship with a US$500 billion tech giant.

An extended work-for-hire development agreement will see the Aussie game developer get another 16 months with the company formerly known as Facebook. The agreement likely quells any concerns that PlaySide had seen the last of Meta after signing a six-month extension more than eight months ago.

The previous work involved conceptualisation, creation, and development of prototype works for Meta's Horizon Worlds. For those wondering, Horizon Worlds is a virtual world that is readily accessible using Meta's Quest VR headsets.

PlaySide CEO Gerry Sakkas commented on the announcement:

Significantly extending and expanding our agreement with Meta further builds on our relationship with this global brand and leader in innovation and validates PlaySide's ability to meet and exceed Meta's expectations as well as generating significant additional opportunities and revenue for PlaySide.

In addition to the 16-month extension, PlaySide has also landed a separate six-month contract with Meta. According to the announcement, this agreement will see the Aussie developer work on a new VR initiative for Meta. The project has a fast turnaround, set for delivery in October 2022.

PlaySide Studios share price recap

It has been a difficult year so far for PlaySide shareholders. The small-cap company's share price has been steadily chipped away, now 40% lower. However, we can see a more positive picture when zoomed out. One that shows the PlaySide Studios share price up an impressive 167% in the past year.

Although, the market might be looking over PlaySide with a sceptical lens due to the composition of its third-quarter revenue. While the company achieved a record quarterly revenue of $13.76 million (up 403%), around half of that stemmed from a one-off sale of non-fungible tokens (NFTs).

The post PlaySide share price jumps 11% after scoring Meta extension appeared first on The Motley Fool Australia.

Many of us would now be holding ASX shares that have halved in value in just the first five months of this year.

The fact that so many growth stocks have suffered the same inglorious fate will be zero consolation to those everyday investors staring at a massive red percentage on their screen.

However, if you need strength to stay the course during such traumatic times, this might do the trick.

The fact is, many experts are saying, for many of those ASX shares, the stock price drops have nothing to do with the actual business performance.

"There is significant negative sentiment pervading almost all markets," Cyan Investment Management portfolio manager Dean Fergie said in a memo to clients.

"Unfortunately we cannot control the market's perception or fear — so we have to concentrate on the results being presented."

Here is one example that Fergie's C3G Fund holds:

Share price crashes while revenue rockets

Video games developer Playside Studios Ltd (ASX: PLY) managed to initially survive the rout of technology shares when the plunge started last November.

In fact, the share price hit an all-time high of $1.19 when trading closed on 11 February.

But since then the stock has almost halved, to close Wednesday at just 64 cents.

As far as Fergie's concerned, that has nothing to do with the health of the business.

"Playside had a huge quarter with revenues up 400% to $13.6 million with a decent contribution coming from their Beans NFT launch."

And with strong prospects, he's still backing the stock to bear fruit.

"Playside continues to drive strong results with both its own gaming IP and its work for marquee clients such as Activision Blizzard Inc (NASDAQ: ATVI). 

"The recent acquisition of Activision by Microsoft Corporation (NASDAQ: MSFT) has highlighted the corporate appeal of gaming companies."

So many buying opportunities out there

Fergie admitted rising interest rates, a federal election, and overseas events are all conspiring against small-cap growth stocks.

"Investors may remain wary for some time yet," he said.

"However, the very best buying opportunities occur when there is pessimism, fear and overwhelmingly negative sentiment, which appears to be the case currently."

While his team will not be able to "pick the bottom" better than anyone else, there are many opportunities out there already where the stock price has divorced from reality.

"It's clear that there are some increasingly evident gaps between price movements and underlying company performance and value."

The post Revenue up 400%: expert sticks by ASX share that's halved this year appeared first on The Motley Fool Australia.

Here's why they could be worth getting better acquainted with:

Airtasker Ltd (ASX: ART)

The first small cap ASX share to consider is Airtasker. It is a growing online marketplace provider for local services that estimates that it has a total addressable market of $600 billion across Australia, the UK, and the US markets.

It has also just announced an agreement to acquire Australia's third largest local services platform Oneflare. This is expected to strengthen its offering and give it a strong presence in trades, home improvement and professional services.

Morgans is very positive on the company. It currently has an add rating and $1.15 price target on the company's shares. Though, that could change in the coming days following the acquisition and the accompanying capital raise.

PlaySide Studios Limited (ASX: PLY)

Another small cap ASX share to that has been tipped as a buy is PlaySide Studios. It is one of the largest video game developers in Australia with a growing portfolio of titles.

In addition, the company has recently announced work for hire deals with a number of industry giants including 2K Games and Activision Blizzard. This appears to demonstrate PlaySide's growing reputation in the industry and could open the door to other deals in the future if everything goes to plan.

Another potential money spinner is the company's exposure to NFTs. For example, it recently revealed revenue of $8 million from NFTs related to the Dumb Ways to Die brand. Aussie NBA star Ben Simmons was a buyer of five of these tokens according to records.

Ord Minnett is a fan of PlaySide. It currently has a speculative buy rating and 95 cents price target on its shares.

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Here's why analysts have named them as buys:

Airtasker Ltd (ASX: ART)

The first small cap ASX share to consider is this online marketplace for local services. It has been growing at a rapid rate in recent years and has been tipped to continue this trend in the future by the team at Morgans. This is due to the broker's belief that the company has a very attractive business model and a significant market opportunity that is in the early stages of ecommerce adoption. Morgans has an add rating and $1.27 price target on the company's shares.

MoneyMe Ltd (ASX: MME)

Another small cap ASX share that is rated as a buy is MoneyMe. It is a financial technology company that leverages artificial intelligence to deliver highly automated credit products and customer experiences. It has also been growing at a solid rate in recent years and appears well-placed for more of the same in the future. Particularly given its recent acquisition of the SocietyOne business for $132 million. Morgans is positive on the company's future, noting that its diverse product suite now combined with the complementary customer base of SocietyOne has the potential to drive further top line growth. The broker has an add rating and $2.60 price target on its shares.

PlaySide Studios Limited (ASX: PLY)

A final small cap ASX share that could be a buy is PlaySide Studios. It is Australia's largest publicly listed video game developer. The company provides titles in a range of categories, including self-published games based on original intellectual property and games developed in collaboration with studios. The latter includes studios such as Disney, Pixar, Warner Bros, and Nickelodeon. PlaySide has also been dabbling, with big success, with NFTs and announced material work for hire deals with a number of games publishing giants. This went down well with the team at Canaccord Genuity, which has put a buy rating and $1.30 price target on its shares.

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But if your tolerance for risk allows for it, having a bit of exposure to this side of the market could be a boost for a balanced portfolio. This is due to the potential returns on offer from promising small caps.

With that in mind, here are three small cap ASX shares that analysts rate highly:

Airtasker Ltd (ASX: ART)

The first small cap ASX share to consider is Airtasker. It is growing online marketplace for local services with an estimated total addressable market of $600 billion across Australia, the UK, and the US. Morgans is very positive on Airtasker's outlook due to this significant market opportunity and its attractive business model. Its analysts also highlight that this is a market that is in the early stages of ecommerce adoption, which puts Airtasker in a great position to benefit as the shift accelerates. Morgans has an add rating and $1.25 price target on the company's shares.

Elmo Software Ltd (ASX: ELO)

Another small cap to watch is ELMO. It is a cloud-based human resources and payroll software company that provides a unified platform to streamline processes. It has been growing at a strong rate in recent years and has continued this impressive form in FY 2022. During the first half, Elmo grew its annualised recurring revenue (ARR) by 35% since the end of June to $98.3 million. This reflects strong trading conditions due to the increased adoption of cloud-software solutions by businesses to manage remote or hybrid workforces. Morgan Stanley is positive on the company and has an overweight rating and $7.80 price target on its shares.

PlaySide Studios Limited (ASX: PLY)

A final small cap ASX share to watch is PlaySide Studios. It is one of the largest video game developers in the ANZ region. It has developed a portfolio of games independently and in collaboration with studios such as Disney, Pixar, Warner Bros, and Nickelodeon. But it won't stop there. The company has recently announced work for hire deals with games publishing giants 2K Games and Activision Blizzard. This could see the company work on some major titles for these gaming giants, which could give its reputation a huge boost. Canaccord Genuity is a fan of PlaySide. It currently has a buy rating and $1.30 price target its shares.

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This is because having a bit of exposure to this side of the market could be a good thing for a balanced portfolio given the potential returns on offer.

With that in mind, here are three small cap ASX shares that have been rated as buys:

Airtasker Ltd (ASX: ART)

The first small cap ASX share to consider is this growing online marketplace for local services. The team at Morgans is very positive on Airtasker. This is due to the broker's belief that the company has a very attractive business model and a significant market opportunity that is in the early stages of ecommerce adoption.

Morgans has an add rating and $1.27 price target on the company's shares.

Catapult Group International Ltd (ASX: CAT)

Another small cap to look at is Catapult. It is a global sports analytics and wearables company that provides elite sporting organisations and athletes with real time data and analytics to monitor and measure athletes. Catapult's products are used by many of the biggest sports teams in the world. During the first half of FY 2022, the company reported a 13% increase in revenue to $37.5 million. This was driven by 29% growth in subscription revenue, which reflects Catapult's strategic shift to a focus on high quality recurring revenue SaaS deals.

Jefferies is very positive on Catapult. It currently has a buy rating and $3.00 price target on the company's shares.

PlaySide Studios Limited (ASX: PLY)

A final small cap share to look at is PlaySide Studios. It is one of the largest independent video game developers in Australia with a portfolio of 50+ titles that are delivered across mobile, virtual reality, augmented reality, and PC platforms. The company has also recently announced work for hire deals with games publishing giants 2K Games and Activision Blizzard.

Canaccord Genuity currently has a buy rating and $1.30 price target on its shares.

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Here's why they could be worth getting better acquainted with:

Airtasker Ltd (ASX: ART)

The first small cap ASX share to consider is Airtasker. It is a growing online marketplace provider for local services that estimates that it has a total addressable market of $600 billion across Australia, the UK, and the US. This sizeable opportunity has caught the eye of the team at Morgans. As has its attractive business model, which the broker highlights works for both sides of the marketplace and has attractive unit dynamics. Morgans also points out that this market is in the early stages of ecommerce adoption, which bodes well for Airtasker's future growth.

Morgans has an add rating and $1.25 price target on the company's shares.

PlaySide Studios Limited (ASX: PLY)

Another small cap ASX share to look at is PlaySide Studios. It is one of the largest video game developers in Australia with a growing portfolio of titles. In addition, the company has recently announced work for hire deals with games publishing giants 2K Games and Activision Blizzard. This demonstrates its growing reputation in the industry and could open the door to other deals in the future.

Canaccord Genuity is a fan of PlaySide. It currently has a buy rating and $1.30 price target its shares.

Serko Ltd (ASX: SKO)

A final small cap to look at is this online travel booking and expense management provider. Serko was hit hard by the pandemic but is bouncing back strongly now. And with the company well-funded thanks to a recent capital raising, it can now focus on its global marketplace strategy. This strategy is aiming to transform the company from an online booking tool into a distributed marketplace. This will also be supported by its game-changing deal with Booking.com.

Ord Minnett remains very positive on Serko. Last month it put a buy rating and $7.93 price target on its shares.

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With all the crazy events going on around the world, many ASX shares have been hammered this year regardless of how the underlying business is going.

And that's exactly the disappointment Cyan portfolio manager Dean fergie relayed to his clients in a memo this week.

"Market sentiment, in the short-term, is a powerful force and the recent inflation fears (and associated rate rises), exacerbated by the invasion of Ukraine and the uncertainty and concerns around energy prices and the potential economic impact, has created almost the perfect storm for many of the fund's holdings."

However, Fergie told his clients that short-term shocks like this still doesn't shake his longer-term faith in the stocks that he's backed.

"In times of turmoil, it is valuable to focus on the underlying operational performance of our investments, particularly when the disconnect between the share prices and business performances has been stark," he said.

"We remain particularly positive given the optimistic results recently released."

Fergie examined 3 ASX shares that plunged in February despite the company performance still remaining strong:

Drink away the world's woes

Shares for craft drink provider Mighty Craft Ltd (ASX: MCL) fell a hair-raising 18% over last month.

Fergie noted that this freefall happened at the same time as it reported spectacular numbers.

The first-half saw revenue of $30 million, which is up 132%, and a "wildly successful launch" of its Better Beer brand.

"With the economy reopening and increased scale of the business post its acquisition of The Adelaide Hills Group, the company moved into profitability in the last quarter of the calendar year — a milestone that looked a pipedream only a few months ago."

According to Fergie, that was not just a fluke half and the outlook remains strong.

"We continue to back management to deliver on their aggressive growth ambitions which include posting revenues in excess of $70 million for FY22," he said.

"Despite these important financial milestones being achieved, the share price did not, in the short-term, reflect the company's underlying achievements."

Mighty Craft shares closed Thursday at 30 cents, which is almost 30% down from the start of February.

Wealth managers in the firing line

Fergie has publicly backed micro-investment platform Raiz Invest Ltd (ASX: RZI) for a while now.

Similar to Mighty Craft, the company reported excellent numbers in February but the share price sunk like a stone.

"Investment platform business Raiz delivered strong growth metrics period-on-period, including active customer growth of 73% to 595,000, funds under management growth of 71% to $1 billion and group revenue growth of 77% to $9.3 million (the vast majority of which is recurring)," said Fergie.

"Again, this was not reflected in share price movement with the stock falling 17% in February."

He suspected general market sentiment went against listed fund managers, with huge selloffs seen in sector stalwarts Magellan Financial Group Ltd (ASX: MFG) and Pinnacle Investment Management Group Ltd (ASX: PNI).

Raiz shares closed Thursday at $1.14.

The software maker that set a new company record 

Healthcare software provider Alcidion Group Ltd (ASX: ALC) reported "solid" half-year results, according to Fergie.

But guess what, its share price plunged 17% in February.

Fergie noted the contracted revenue of more than $27 million was a company record, despite COVID-19 delaying purchasing decisions in UK hospitals.

"As such we expect some material short-term catalysts by way of new contracts out of the region," he said.

"Alcidion is building a very strong position in the healthcare industry which is expected to rapidly expand as the digitisation of the healthcare industry accelerates."

The Alcidion share price finished Thursday at 18 cents.

Deals galore in February, but share price didn't match the news

Fergie has also been a longtime fan of games developer Playside Studios Ltd (ASX: PLY), which saw its shares lose 9% in February.

Again, Fergie is consoled by an excellent half-year report.

"This Australian-based game developer delivered a great interim result which clearly illustrated its strong growth and a healthy outlook," he said.

"Revenue grew 61% half-on-half to $9.4 million." 

In the same month, Playside revealed it booked $8.4 million in revenue in just one week after it launched Beans NFT.

"Further good news was released when Playside signed a material work-for-hire contract with Activision Blizzard Inc (NASDAQ: ATVI), one of the world's most successful interactive entertainment companies and maker of iconic games such as Call of Duty, Overwatch, Guitar Hero and Candy Crush."

The share price movement in February confounded Fergie.

"Through the month the share price of PLY rallied from $1.02 to $1.40 before, disappointingly, ending the month at $0.93 — a head-scratching outcome given the materially good news."

Playside shares closed Thursday at 94 cents.

The post 4 fallen ASX shares that are still awesome businesses: expert appeared first on The Motley Fool Australia.

With that in mind, here are three small cap ASX shares analysts rate highly:

Airtasker Ltd (ASX: ART)

The first small cap ASX share to consider is this growing online marketplace for local services. Management notes that the company has a huge market opportunity to grow into in the future. It estimates that it has a total addressable market of $600 billion across just Australia, the UK, and the US. The team at Morgans is very positive on Airtasker due to this significant market opportunity and its attractive business model. The broker notes that the company's product works for both sides of the marketplace, has attractive unit dynamics with healthy gross and contribution margins, and is in a market that is in the early stages of ecommerce adoption.  Morgans has an add rating and $1.25 price target on the company's shares.

Bigtincan Holdings Ltd (ASX: BTH)

Another small cap to watch is Bigtincan. It is a provider of enterprise mobility software that allows sales and service organisations to improve mobile worker productivity through smart devices. The company notes that global businesses including Nike, Guess, Prudential, and Starwood Hotels use its software to allow customer-facing teams to intelligently prepare, engage, measure and continually improve the experience of their customers. Morgan Stanley is a fan of Bigtincan and has an overweight rating and $2.10 price target on its shares.

PlaySide Studios Limited (ASX: PLY)

A final small cap ASX share to watch is PlaySide Studios. It is one of the largest video game developers in Australia. It has a growing portfolio of games, including ones developed in collaboration with studios such as Disney, Pixar, Warner Bros, and Nickelodeon. PlaySide has also recently announced work for hire deals with games publishing giants 2K Games and Activision Blizzard. This appears to demonstrate its growing reputation within the industry. Canaccord Genuity currently has a buy rating and $1.30 price target its shares.

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Here's what you need to know about these growing small cap ASX shares:

Nitro Software Ltd (ASX: NTO)

The first small cap to watch is Nitro Software. It is a document productivity software company that is aiming to drive digital transformation in organisations around the world.

Nitro is doing this with its Nitro Productivity Suite. This suite provides businesses of all sizes with integrated PDF productivity and electronic signature tools through a horizontal, software-as-a-service, and desktop-based software solution.

Management is very positive on the future, particularly after a recent acquisition strengthened its offering.

It said: "Nitro believes the expanded product suite delivered by the Connective acquisition will drive substantial opportunities in the fast-growing US$17 billion global SaaS eSign market as organisations around the world increasingly demand high-trust and highly secure eSign and workflow solutions."

In response to its recent full year results, the team at Bell Potter put a buy rating and $2.75 price target on the company's shares.

PlaySide Studios Limited (ASX: PLY)

Another small cap to watch is PlaySide Studios. It is one of the largest independent video game developers in Australia.

At present, the company's portfolio comprises 50+ titles that are delivered across four platforms. These are mobile, virtual reality, augmented reality, and PC. Among these titles are games developed in collaboration with studios such as Disney and Pixar.

PlaySide has also recently announced promising deals with a number of parties. This includes games publishing giants 2K Games and Activision Blizzard, as well as gaming influencer company One True King. These deals look set to support the company's growth in a market estimated to be worth US$159 billion per annum at present.

Canaccord Genuity currently has a buy rating and $1.30 price target on its shares.

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