“High risk, high reward” just about sums up investing on AIM
If you want to lose your shirt, AIM is probably the market in which to invest.
Having said that, it is also the market where you are most likely to score the proverbial ten-bagger – a stock that goes up tenfold.
Not in a single year, maybe, although in 2018 two stocks – Regal Petroleum PLC (LON:RPT) and Tern PLC (LON:TERN) – gave it a good stab; the former was up 632% and the latter was up 622%.
Regal’s year started on a high note, with the shares doubling in January after a positive update on its operations in Ukraine and really kicked on in the final third of the year after the company issued a reserves and resources update.
The new estimate put remaining reserves, as at the end of 2017, at 27.8mln barrels of oil equivalent (boe) and proved plus probable reserves at 50mln boe; in the previous estimate, the numbers were 1.9mln boe and 11.7mln boe respectively.
As for Tern, it ended 2017 at 2.25p and at one point hit 47.5p – a ten-bagger and then some – before profit-taking set in.
The company, which backs technology firms, has seen interest in its portfolio company, Device Authority, soar. Device Authority provides simple, innovative solutions to address the challenges of securing the Internet of Things.
The gains by Regal and Tern make the 394% rise in Bushveld Minerals Limited’s (LON:BMN) shares look drab in comparison but I do not imagine the vanadium producer’s shareholders will mind.
We’ve been following Bushveld’s story on Proactive since 2012 when it was focused on iron ore and to a lesser extent, tin.
Bushveld has, however, long had a position in vanadium and it’s the recent consolidation of its ownership of the Vametco mines that has driven the stunning advance in share price this year. Investors have not been slow to appreciate that one of the few companies in the world with primary vanadium production presents a real opportunity.
The other mining company in the top 10 AIM risers was Anglo Asian Mining PLC (LON:AAZ), which we’ve been following closely since 2010 (I would not want you to think that every small-cap Proactive covers closely turns into a stock market star; as the old saying goes, you have to kiss a lot of frogs before one turns into a frog).
This year, the Azerbaijan-based gold, silver and copper miner started looking less frog-like and more princely from about October onwards after a production update.
In the three months to September, production rose by 38% year-on-year and by 28% quarter-on-quarter to 24,400oz gold equivalent.
The stock ended the year up 394%.
The rest of the AIM top 10 was made up of four technology stocks and two from the health sector.
Pebble Beach Systems Group PLC (LON:PEB), up 277%, has not looked back since it agreed on new banking terms with Santander in April.
November saw the broadcasting software specialist’s shares take fight again after it received two new significant orders.
Sopheon PLC (LON:SPE), up 192% this year, made a habit of raising guidance this year just about every time it issued an update.
Sopheon provides customers with software (enterprise programmes) that help the “client paint their go-forward growth strategy, track performance of strategic initiatives, and implement changes with speed and agility in response to how their businesses and markets perform”.
Another trigger has been the growth of Accolade, Sopheon’s flagship enterprise software product, where there has been a sharp rise in the size of the contracts being won.
Like Sopheon, Elektron Technology PLC (LON:EKT) ratcheted up full-year expectations more than once in 2018.
The shares rose 145% on the year with the late October trading update coming just in time to rejuvenate the shares.
Beeks Financial Cloud Group PLC (LON:BKS) has only been listed since November 2017, when it made its market debut at 50p. The shares now trade at 105.5p.
Its first set of full-year results contained some sparkling numbers, with underlying profit before tax of £1.19mln (up from break-even the year before) made on revenues up 41% year-on-year to £5.58mln.
Junior drug developer SalvaRx Group PLC (LON:SALV) hit paydirt when it sold off its portfolio of immuno-oncology assets to Portage for US$75mln in an all-share deal. The selling prices represented a premium of more than 250% to SalvaRx’s market valuation on the day before the announcement of the sale.
The shares were up 277% on the year.
Last, and almost least, medtech company Creo Medical Group PLC (LON:CREO) was the eighth-best performer on AIM this year with a 176% advance, on the back of some distribution agreements and some breakthroughs for its Speedboat endoscopic advanced energy device.
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