Small companies listed on the ASX have wavered this year after a buoyant 2025 in which the S&P/ASX Small Ordinaries Index rose 25% fuelled in large part by companies in the resources sector.

The index reversed those gains in the first six months of 2026 with a 9% overall decline, despite a 3% gain in the June quarter. The broad volatility of the small caps index, however, can mask selective opportunities to invest in individual companies which may outperform over time.

Below are six ASX-listed small companies that Sandstone Insights has recently discussed in its research coverage.

Fenix Resources

Western Australian (WA) iron ore producer Fenix Resources (ASX: FEX), unlike other small miners, has control over its whole iron ore movement chain from pit to port, says Michael Bentley, Mining and Metals analyst at MST Financial, parent company of Sandstone Insights.

“It has mines and it has a logistics business with low-cost trucking that can transport iron ore to Geraldton Port. It has facilities at the port, including iron ore loaders, storage sheds and ship loaders. It also recently announced an agreement with a large international shipping firm,” Bentley says.

The end result is that it controls the iron ore from when it is dug up to the point at which customers in China receive it.

“The company started out with a single mine producing a relatively small amount of high-grade iron ore. Now it has three mining sites and is expected to grow over the next few years from 1.5 million tonnes to 10 million tonnes of production by 2031,” Bentley says.

“This will not only increase revenue but also produce economies of scale that could generate higher profitability and cash flow over time. It is a well-managed company that has delivered on its growth strategies as an ASX entity.”

Rumble Resources

WA-based miner Rumble Resources (ASX: RTR) is expected to begin production at key sites and generate cash flow in the next 12 months. Its two key assets are the Western Queen Project (a gold and tungsten deposit) and the Earaheedy Project (zinc, lead and silver deposit).

Its focus is the Western Queen project as it can be brought into production in the short term. It recently struck an agreement for gold to be processed at a mill just 180 kilometres from the site, which means it does not have to outlay capital to build its own mill or wait for approval to do so.

“It is a company that can move into production rapidly. It has just increased its global resource of high-grade gold to around 433,000 ounces. There are higher grade patches that can be easily reached early and get high margins,” Bentley says.

“Why do we like this stock? It is a low capex entry into a gold producer. It will have decent margins at around about US$4,000 per ounce of gold and its milling agreement allows it to be processed. It has cash in the bank right now because it recently secured $10 million in non-dilutive royalty funding.”

He also points to the tungsten available at the project which can be mined at the same time as gold which may provide an additional source of project revenue for investors.

Hillgrove Resources

South Australian miner Hillgrove Resources (ASX: HGO) experienced a difficult 2025 due to operational challenges stemming from lower-than-expected grades in the copper it produced. This curtailed growth in free cash flow but those challenges are beginning to recede.

Chris Drew, Metals and Mining Analyst at MST Financial, says the miner generated positive free cash flow in the March quarter and that he expects its cash position to continue to build. According to Drew, improved cash generation may increase market focus on the company's performance.

He also identifies medium-to long-term growth opportunities that had been largely ignored by the market over the past year. These include its acquisition of the Mutooroo project, which is 600 kilometres away from its main Kanmantoo copper mine.

Drew says the acquisition could be significant to the company's longer-term development plans. “It essentially doubles the existing resource and will potentially allow Hillgrove to increase copper production from around 15,000 tonnes to 25,000 tonnes per annum,” Drew says.

The next major near-term catalyst for the company will be its June quarterly report later this month. The ramp up in production at the Nugent deposit, improved copper prices, and reduced sales into its lower priced hedge may influence future operating and cash-flow outcomes.

Elevate Uranium

Elevate Uranium (ASX: EL8) has one of the largest uranium resource bases in the junior sector at around 170 million pounds across Namibia and Australia, according to Drew.

“Despite that large resource, the company’s value is constrained by the relatively modest grade across its major Namibian projects,” he says.

The company’s development of a proprietary processing method called U-pgrade may transform the economics of its deposits and allow the company to better capitalise on a shift in attitude towards uranium.

“Much of the world has done somewhat of a u-turn on nuclear power and now accepts it as a key part of enabling broader electrification and decarbonisation trends. That means the demand profile for uranium continues to look very robust,” Drew says.

“Elevate is trading at one of the cheapest multiple valuations in the space because the market is pricing its assets like they won’t get developed.” Drew says the commercialisation of the U-pgrade technology may influence future assessments of the company's projects.

Pengana Capital Group

Diversified asset manager Pengana Capital Group (ASX: PCG) began life as a predominantly equities investor but its private markets portfolios are likely to be the key future driver of its business.

“Pengana's private credit fund has been accelerating for the past two years and underwent a material step change in assets under management in the second half of last year,” Michael Trott from MST Financial says.

“We believe Australia is still in the very early stages of private credit growth, especially in terms of access for retail investors.”

He flags Pengana’s TermPlus 1-year investment as a vehicle which taps into that market – by giving investors a fixed term account that gives investors a floating RBA+ target rate with monthly distributions.

Trott says the market's assessment of Pengana may be influenced by the changing composition of its business.

Areas being monitored by analysts include its June-end fund update and, more so, its financial year results in August 2026 (may provide additional information regarding growth in its private credit platform).

“Other things to watch at the result will be the performance fees and commentary on the crystallisation of the investments in the likes of SpaceX, but then also Anthropic and OpenAI as they go to IPO.”

Change Financial

Brisbane-based technology company Change Financial (ASX: CCA) provides payment solutions, card issuing and testing to banks and fintechs. It has two key products – the Vertexon platform (which is a payments as a service solution, or PaaS, that generates 83% of the company’s revenue) and PaySim.

PaySim is a higher margin payment testing product that is now a default standard for EFTPOS testing in Australia.

Trott says a robust sales pipeline for the Vertexon platform and the modernisation of PaySim may help it expand globally both indicate well for the business. Near term catalysts for the share price include its quarterly results in July 2026 and full-year results likely at the end of August 2026.

“The company has already upgraded its FY26 guidance. If it can beat these already upgraded numbers, it should be a positive catalyst and speaks to that overarching thesis we have on the margin improvement going through the business,” Trott says.

“A longer-term catalyst relates to the company’s capacity to issue single-use virtual cards. We believe this is greatly under-appreciated in the context of the agentic commerce revolution.

“There are two schools of thought: agents could make payments either via tokens and stablecoins, or via single-use virtual cards, with both technologies providing sufficient programming scope for enabling and restricting purchasing abilities of the agents themselves. We'll wait to see what happens with all of that.”

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