AIM: Right On The Line
It might be said that every day the FTSE 100 remains on the right side of last year’s 8,500 resistance can be regarded as a win. This is especially true given the way since last year’s May record, leading stocks fell back ahead of the General Election, not breaking higher again until the run up to President Trump’s inauguration in January.
Since then we have had the tariffs, in which the UK seems to have fared better than most. We have also had better growth than expected, but this week, rather worse inflation. That said, the UK looks to be the least worst of choices for international investors, especially those who simply do not like Trump, or regard the US as being a rather volatile destination for their money. This is despite the TACO acronym, Trump Always Chickens Out, something which means that any dip on a crackpot announcement should be bought into. So far this strategy has worked. It just depends how draconian the King Canute type policy making approach continues to run.
As for the small caps in the UK market, the past week saw it flat, after the AIM All Share index hit the key 740 resistance level. A look at the charting of this market shows that the 740 zone has been a key barrier since October. Above it, one could argue we are out of the woods. Below it, the misery of a small cap market in disarray continues where one focuses on the lack of liquidity, the red tape, and all the virtue signalling of all the people who are paid to make things better, but do not. Remember that while the AIM index closed at 736 on Friday, at the time of the pandemic peak in September 2021, it peaked at 1317. We still have a long way to go, and a lot of things to sort out.
The Last Day In The Life Of A CEO
This week marked the departure of George Roach, CEO of Premier African Minerals, a man who has been steering his company since 2007. What should be remembered is that at least in the small cap zone, win or lose, CEOs are generally going around with a gun at their head. Both financially, and psychologically, this is a tough place to be. This is made even tougher, as due to stock market rules, most of the battles they fight, and issues they come across are faced in private. The swan on the water analogy is appropriate here in the sense that whether a CEO is doing nothing, or working frantically, it will always look calm (or relatively calm) on the surface. The reality of small caps remains that most will ultimately fail, a few will soar, but all will be vulnerable to black swan events, and bad actors. The bad actors in this case would be shorters, who will do and say anything to bring such companies down, or those who have failed in business themselves. The final issue for small caps, may actually be the most important: the quality of the management. Indeed, as someone who has interviewed dozens, perhaps hundreds of CEOs over the years, it is interesting to note how much one can tell from the first 30 seconds of an interview. The ideal CEO is obviously one who knows his onions. That said, watch out for the smoothest talkers. There is a goldilocks zone in all of this. We have seen some of the goldilocks zone, a mix of CEOs with a strategy and experience, turning shells around and / or getting investors inspired by what they are doing.
Stocks Rising On News
Coinsilium (AQSE:COIN) and The Smarter Web (AQSE:SWC) have seen their shares soar off the back of the currently hotter than July Bitcoin Treasury Strategy. As I commented during the week, it has taken a while for UK investors to get on the back of the BTS, as exemplified by Microstrategy (MSTR). In the US the BTS strategy took off in 2023, with the shares up 3x, and another 3x last year. With the Bitcoin 2025 event on Tuesday in Las Vegas (I was toying with going), one would expect a further decent squeeze higher. I am looking at a best case 9p and 80p respectively for COIN and SWC. The market certainly needs all this pizazz. This week COIN revealed a Strategic Update on its Forza! Bitcoin Treasury Accumulation Roadmap, while SWC announced purchases of 23.09 bitcoin at an average purchase price of £80,126 per bitcoin, for a total consideration of £1.9 million.
Mast Energy Developments (MAST) saw its shares rise 120% on the week (fulfilling a bullish charting call) as it announced that it has entered into a CLN and an equity fundraise pursuant to a warrant instrument to raise up to £5.0 million via those lovely people at Fortified Securities. What is interesting here is that the shares rocketed, something which as in the case of Metals One (MET1) might indicate that UK investors finally appreciate that firstly the most capitalised a company the better, and second, that companies are listed to raise money, not to be in a place where it is almost impossible to raise money. After a long wait to hit the jackpot, it would appear that Mila Resources (MILA), the post-discovery gold exploration accelerator, has finally done it, with the shares up nearly 100% on the week. The company announced the first batch of high grade gold assay results from its maiden drilling programme at the Yarrol Gold Project in Queensland, Australia.
TheWorks.co.uk (WRKS), the retailer of affordable, screen-free activities for the whole family saw its shares up 45% on the week, after a trading update for the 52 weeks ended 4 May 2025. The sizzle here was “FY25 and FY26 profit guidance upgraded; driven by strategic progress, strong Q4 performance, sustained margin growth and ongoing operational efficiencies.” There was a 26% share price rise on the week for Blencowe Resources (BRES) as the Orom-Cross graphite project developer in Uganda, announced receipt of the latest disbursement of $0.5 million from the US International Development Finance Corporation (“DFC”). What is strange here is that the market simply does not go wild that the US government is backing BRES’s project. This is like Apple or Microsoft backing your tech start up. Whatever the case the last injection takes total funds received under the overall $5.0 million technical assistance grant to $4.0 million. “This grant funding is non-dilutive and comes with no requirement to repay under any circumstances.”
In fact, Jangada (JAN) which has 7% of BRES saw its shares up 29% on the week, beating its investee. Perhaps the most cost efficient and news efficient riser of the week was Defence Holdings (ALRT), the vehicle of First Sentinel CEO & Founder, as well as 1990s boy band member look-a-like, Brian Stockbridge. Well known in the City, and of near legendary status, so far our Brian seems to be showing that he can move smoothly from being gamekeeper to poacher, or is it the other way around? The sizzle for shares of ALRT of which he is director, were two heavyweight appointments to the board, the result of which was a massive 4x rise in the share price on the week. Truly inspiring, given the hope value that has been added to the stock.
What was inspiring last year was the 3x rise in Road Real Estate (ROAD) shares, and judging by this week’s news of an intention to deliver a 14.3m share buyback. As has been said on social media, all shareholders need to do is sit back and watch the share price go up. The only uncertainty is whether the stock of the investor in roadside property will go up 50%, 100% or more etc, etc? On a charting basis, and with the AGM due on June 17, a target to shoot for would be 55p by the end of next month, at the top of a rising trend channel from 2023. Ideally, we stay above the 200 day moving average now at 27p in the meantime.
Stocks Rising On No News
Upland Resources (UPL) is one of the best in the market that one could describe as being a favourite in the “no smoke without fire” category. Any wriggle in the share price is seen as being the forerunner of BlockSK334 going ballistic. Last month UPL teased better than a stripper with the following lines: “The Company is currently in a sensitive position, having signed several key agreements that are material to its ongoing development and future growth. Given the nature of these developments, Upland is operating with an appropriate level of discretion at this time.”
GCM Resources (GCM) was up 35% on the week, with the last we heard in a big way being the interims at the end of March. At the time GCM said it believes the outlook for moving the proposed Phulbari coal mine forward has greatly improved on the basis of the Bangladesh government being serious in addressing its lack of domestic coal production in the near term. Therefore it would appear that shareholders of GCM are waiting on the equivalent of the Man From Del Monte giving the thumbs up. Northcoders (CODE) continued to rebound after the technology training group revealed a swing to profit last month. The shares are still down 65% on the year to date, but interestingly revealed a “gap close” charting buy signal on the weekly close above 62p. Let’s see if it works.
For Woodbois (WBI) we see the tentative recovery for the shares, even though there was no fresh news for the Africa-focused forestry, timber trading and afforestation company. Nevertheless, with new management and an evident determination to pay down debt, the recovery in the stock delivered a 45% gain on the week.
Fundraises & Warnings
As far as business models go, it must be tough to make a dog’s dinner out of healthcare contracts, especially given the way that the NHS is a massive gravy train, and has no need at all to be discerning regarding its contracts. But somehow, we have got to the situation where Totally (TLY) has waved the white flag, after a couple of red flags earlier this year, and indeed, the odd green flag in H2 last year.
As mentioned above, it would appear that it is starting to sink in as far as the London stock market that one of its main functions is to raise money for companies. Therefore, those who go for a “gotcha” when a placing is concerned, have not discovered America or indeed, helped anyone apart from their shorting friends. I would turn this around. If a company is on the stock market and has not raised money for a long time, it is not using its listing adequately.
This point is underlined by the £7.6m raised by Kefi Minerals (KEFI) the gold and copper exploration and development company focused on the Arabian-Nubian Shield, to advance Tulu Kapi. If this fundraise is needed to take the company forward, rather than moaning, rejoice. The same can be said of Optibiotix (OPTI) the life sciences business products which reduce hunger and food cravings, enhance the gut microbiome, and sweet fibres as healthy sugar substitutes. It raised £750,000. While in an age of weight loss jabs, the microbiome sounds about as useful as playing a blu-ray when you can stream, let’s give the company the benefit of the doubt, especially given the US partner angle.
Disclaimer & Declaration of Interest:
The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion.
