Three cheap small-cap shares to buy now

While the economic outlook remains grim, professional investor Mark Niznik believes the smaller-companies sector will produce good rewards for investors over the next three to five years. Here, he picks three cheap small-cap shares to buy now.

Each week, a professional investor tells MoneyWeek where he'd put his money now. This week:Mark Niznik, co-manager of the Artemis UK Smaller Companies Fund.

After turning more positive towards the end of last year, even we've been surprised by the speed of recovery in smaller-company share prices in the first half of 2009. Our best-performing stocks so far this year have been mostly those which were hardest hit in 2008. This bounce was built on a 'relief reaction' to a slowdown in the pace of economic decline coupled with some very cheap valuations. And the benefit was felt most by some of our resource holdings, such as Kenmare, Aricom and Salamander Energy, along with Alterian (a marketing services software firm) and REA Holdings (an Indonesian palm-oil grower).

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Swipe to scroll horizontally
Xchanging275.75p157.75p191.5p
Chemring2,426p1,527p2,032p
Babcock International619.5p306p477p