Could these two small-caps help you to retire early?

Retirement date circled on a calendar
Retirement date circled on a calendar

Small-cap shares can no doubt be volatile, yet the upside is that they can offer the potential for substantial capital gains. Today I'm running the rule over two small-caps that look like interesting opportunities.

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Amino Technologies

The way we watch TV has changed dramatically in the last decade or so, and one company at the heart of this change is £140m market cap Amino Technologies (LSE: AMO).

Based in Cambridge, Amino is a global provider of digital TV entertainment and cloud solutions, and has developed a range of products and solutions designed to help broadband network operators deliver entertainment and associated connected home services to the consumer.

Shares in Amino have been on fire recently, gaining a huge 83% over the last 12 months. Can this share price momentum continue?

Amino reported excellent results in February, announcing that the successful integrations of two recent acquisitions had served to increase the company's scale and helped to fuel strong revenue and profit growth over the past 12 months. Indeed, for the full year, revenue increased 80% to £75.2m, including organic revenue growth of 7%, adjusted profit before tax rose 96% to £10.2m, and the dividend was increased by 10% to 6.05p per share.

Management was upbeat about the future, stating that with a strong order book and an improved sales pipeline visibility for the first half of 2017, the company is looking forward to "further long-term sustainable profitable growth."

Small-cap companies are often less researched than larger companies, and in Amino's case, just three analysts cover the stock. Consensus earnings of 13.2p for FY2017 place the company on a forward looking P/E of just 14.8, an undemanding valuation for a fast-growing company operating in an exciting sector.

Amino also has dividend appeal, with last year's payout of 6.05p equating to a yield of 3.1% at the current share price. It's also worth noting that the company has increased its dividend every year for the last five years.

Overall, Amino Technologies certainly looks like an attractive opportunity in the small-cap space and I believe the stock could offer further gains despite the recent share price momentum.

Alliance Pharmaceuticals

Another small-cap that looks interesting is £223m market cap Alliance Pharmaceuticals (LSE: APH), a company involved in the acquisition, marketing and distribution of pharmaceutical products.

After the acquisition of Sinclair Pharma plc in 2015, sales and profits in 2016 were more than double the previous year, and the company now has significant geographical diversification, with sales being generated in over 100 countries.

City analysts forecast earnings growth of 6.5% and 12% for the next two years, and management recently stated that "the current year has started well and we look forward to building on our foundations: an attractive, balanced portfolio, an expanded geographic footprint and a strong team."

The healthcare sector has considerable long-term investment potential to my mind, with ageing populations and on-going medical advances set to underpin the sector's growth in the years ahead. And on a forward looking P/E ratio of just 11.5, with a dividend yield of 2.6%, Alliance Pharmaceuticals looks like a small-cap stock that warrants closer inspection.

Is this an even better small-cap opportunity?

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Edward Sheldon has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

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