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Have £5k to spend? 4 dirt-cheap small caps I’d buy and hold until 2030

If you’re hunting lesser-known bargains I reckon Nexus Infrastructure is worth a look. As I type, the small cap trades on a forward price-to-earnings (P/E) of just 11 times following recent share price weakness.

It’s a reading I think fails to reflect the essential nature of its services. Nexus Infrastructure provides concrete frames, drainage systems, utilities connections, and other critical construction products. This should help it weather an upcoming cooldown in the broader sector much better than most.

And over the long term, Nexus Infrastructure’s profits outlook remains quite robust. The UK needs to continue building lots and lots of homes to soothe its housing shortage. I’m expecting the company’s products to remain in demand for years to come.

Bush baby

Bushveld Minerals Limited is another dirt-cheap small cap worthy of serious attention right now. It carries an earnings multiple just inside the bargain benchmark of 10 times and below for 2020, a reading that fails to reflect rocketing demand for vanadium.

At present this particular resource is best known for its use in the manufacture of steel. Indeed, around four-fifths of the world’s vanadium is combined with iron in order to strengthen steel products. But its growing role is in the field of energy storage, which offers the potential for explosive price growth for this commodity.

Bushved Minerals itself reckons this one application could cause vanadium demand to swell at a compound annual growth rate of 8.4% through the next 10 years. It could be well worth grabbing a piece of the mining giant at current prices, then.

Another smashing small cap

Applegreen is another small-cap bargain that’s great for value. Right now it sports a forward P/E ratio of just above 10 times, a reading that fails to recognise its exceptional defensive characteristics.

The petrol station retailer has been dented by recent quarantine measures and the subsequent fall in road traffic. Things are looking up as the lockdown measures are gradually lifted, though. And Applegreen need not worry about the economic downturn on revenues across its gas stations and motorway services sites. Food, drink, magazines, and the like remain must-haves for weary travellers whatever other troubles are rumbling on.

I’ve tipped Applegreen before as a top growth buy because of recent expansion in the UK and the US. I continue to think it’s a brilliant buy for this new decade.

Tech titan

I reckon Telit Communications is another small cap to own for the 2020s and well beyond. It’s a specialist in the ‘Internet of Things’ (IoT) segment, that mysterious sphere whereby electronics devices communicate directly. This can be anything from your smartphone to your coffee maker, your boiler to your television.

Hewlett Packard expects the number of IoT-connected products to more or less treble between 2019 and 2025 to reach 75bn. And Telit Communications is clearly in the box seat to ride this latest great technological revolution. It’s already reporting ripping IoT sales growth and should continue doing so long into the future.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Applegreen. 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.