Continued Recovery
The saga of UK small caps being both “undervalued and overlooked” as well as participants continuing to get abused, and insulted, over and above all the red tape, cost and in the end, trying to run a business, continues. This week’s pearls of wisdom on the matter came from Morningstar, who one can consider, told us what we already know.
“UK small caps have been out of favour in recent years, impacted by domestic and global issues like Brexit, Covid-19, and political instability. Assets are at a 10-year low after surging post-Covid, with more fund closures than launches so far in 2025. UK small caps have been an attractive asset class over the long term, and despite these headwinds, should not be overlooked by investors. They remain attractively valued on both an absolute and relative basis which has resulted in elevated share buyback and M&A activity.”
But of course, who cares if the spreads are wider than the Atlantic, and government policy is deliberately targeting wealth creators and entrepreneurs, in terms of squeezing the last penny out of them. And of course, in the unlikely event that a company succeeds those concerned are part of the hated elites, or first in line for a wealth tax a la “successful” trader Gary Stevenson. In fact, why does he not get the ball rolling by giving away all his millions?
Hot Situations
Of course, there are entrepreneurs in the market who are doing their best to make the stock market a better place to make money. Of course, as soon as they turn a company into an AI play, or a Bitcoin Treasury play, or whatever might excite investors, the guns start firing at them. Cynical / bitter and twisted commentators / failed people obviously start bleating as soon as share prices go up and people make money, not apparently realising that this is the purpose of the stock market. The stock market is also a place to raise cash cheaply and efficiently, something else these people do not want to understand. But of course, the politics of envy, and clickbait, drive much more internet traffic, than being constructive. Even more interesting of course, is that there is apparently no one inside the market, or amongst regulators, who is keen to do anything to give the stock market itself some decent PR. We need someone to do for the stock market, what Jeremy Clarkson has done for the farmers, assuming it is not his fault the government has done its best to kill off farming with inheritance tax. That said, we do need exciting companies and exciting concepts to come to market, and have an incentive to do so given the state of the economy. At the moment, there is every incentive for a growth company to stay private.
Stocks Rising On News
Speaking of stocks that come up with an idea, that then has spiteful cold water poured on it, Cel AI (CEL) became the latest small cap company to enter the fray as far as the Bitcoin Treasury concept. The result of this and the £500,000 raise was a 200% rise for the shares on the week. Coinsilium (AQSE:COIN) added to its recent £1.5m fundraise at 3p, with another £2.5m at 6p via Oak Securities (again), doubling down on the digital assets strategy. The shares still managed a 75% rise on the week.
The Smarter Web Company (AQUIS: SWC), another BTC Treasury play, announced the purchase of additional Bitcoin as part of “The 10 Year Plan” which includes an ongoing treasury policy of acquiring Digital Assets, and 24.53 new BTC this week. The company has doubled the timeframe of the plans delivered by the Soviets and the Chinese in the 20th century, something to think about. By10 years, some of us will have hung up our boots, hopefully with SWC being in the FTSE 100, or be involved in assisted dying, whether on a voluntary basis or not.
Also joining the BTC Treasury brigade was Helium Ventures (AQSE:HEV) with a new bitcoin treasury initiative in partnership with NewQube Holdings Ltd. The shares managed a 21% jump. A company which is not such as johnny-come-lately to the digital space is Tap Global Group (AQSE: TAP). The payments and cryptocurrency settlement services app, announced an income boost for the current financial year ending 30 June 2025 from the recoupment of Bitcoin rewards paid out between 2020-2024 as referral incentives. The result of this was that the shares were up 13%, although really the stock should be much higher given that even in November it was up at 3p plus as compared to 1.7p now. Someone there should pull their finger out.
Blue Star Capital (BLU), the investing company with a focus on blockchain, esports and payments. BLU noted the announcement by SatoshiPay Ltd that its investee company, Vortex has achieved $1 million in transaction volumes since launching in Europe and Brazil, with $507,000 of the total achieved in May 2025. The shares were up over 100% over the week. On a similar note in terms of crypto, Pri0r1ty Intelligence Group (PR1), a company in AI-driven professional growth services for small and medium enterprises (SMEs), announced that it has integrated cryptocurrency payment options into its online onboarding process. Customers can now enjoy the convenience of transacting with Bitcoin and other stable coins.
Another company which is at the cutting edge was in focus. This time IntelliAM AI plc (AQSE: INT), a software company leveraging the power of AI and machine learning in the manufacturing industry. CEO Tom Clayton now has had his direct interest in the company rising to 24.83%. As always, it is good to see management leading from the front in this respect. Clearly, the boy is keen, as is the market, with the shares up 25% on the week.
Defence (ALRT), the UK’s first publicly listed pure-play defence technology platform, announce that it has raised £3 million, at a price of 0.325p per share. Fortified has been granted a broker offer to raise up to an additional £1m at the Placing Price. I note that the company is going to start its PR offensive with the a la mode Tiktok style video brigade. That said, still not sure these work for the over 25s.
Avacta Therapeutics (AVCT), a life sciences company going for the powerful anti-tumor payloads announced the appointments of two new heavyweights, David Bryant and Richard Hughes as Non-Executive Directors. While beefing up the board of a company on the backfoot does not always work for the share price, in the case of AVCT it has so far, with a 34% rise over the week.
Altona Rare Earths (REE), a resource exploration and development company focused on critical raw materials in Africa, announced a very encouraging initial fluorspar metallurgical testing results, and the discovery of further fluorspar occurrences within the mining licence, creating conditions conducive to produce acid-grade fluorspar at Monte Muambe. I interviewed the company a few months ago, and it would appear that finally, helped along by China’s export ban, as well as the latest discovery, the shares are on their way: up 57% this week.
Zenith Energy Ltd. (ZEN), the listed international energy production and development company, announced that it has completed a private placement in the United Kingdom and in Norway. The UK Financing and Norwegian Financing have attracted the participation of new and existing investors to raise an aggregate total amount of approximately £2,257,000. ZEN has also acquired a total of three solar energy production assets in Italy, located in the regions of Piedmont and Lazio, by way of its Italian subsidiary created for the purpose of managing its new solar energy portfolio WESOLAR S.R.L. ZEN said “We are successfully implementing our growth strategy to achieve the objective of building a portfolio with 20 MWp capacity by the close of 2025.” What is interesting here is that even though the company could just put its feet up as it awaits a potential $600m arbitration win against Tunisia, it is actually going about its business, in this case in renewable energy.
Stocks Rising On No New News
It cannot be emphasized how damaging mudslinging is to small companies, if only the attempt to get a win for shorters, at the expense of scaring ordinary private investors out of a stock. In the case of First Class Metals (FCM), the tirade against the company, whether based on any grains of truth or not, or whether they were relevant to its fortunes, were totally out of order. Indeed, it is a blight on the stock market that nothing is being done about such attempts at corporate assassination, for petty financial gain or simply sociopathic malice. But at least this week, without any fresh defamation, the shares were up over 100%. One wonders how the people who sold out below 1p feel now versus the 2.70p close on Friday. It may be assumed that fresh, positive funding news is on its way.
Oxford Biodynamics (OBD) was another recovery play, and perhaps not too surprising a candidate either. Having raised £7m a few months back at 0.5p, the shares clearly drifted enough towards 0.3p to shake out the last of the weak hands. It also helps that the company’s prostrate test looks to be a game changer, and one that will be monetised in a significant way, sooner rather than later. The shares rose 38% on Friday.
Shares of Surface Transforms (SCE) a manufacturer of carbon fibre reinforced ceramic automotive brake discs, were also up 38% this week. We heard from the company in March that “strategic discussions with certain key customers regarding longer-term arrangements are at an advanced stage. Further updates will be provided in due course as appropriate.” Presumably, we are getting nearer to the big reveal.
Mulberry (MUL) rose 37.5% towards the end of the week. Here we have not heard anything significant since the handbag maker announced a sales decline at the end of January. Perhaps the market is looking forward to the company’s preliminary results due out next month, or perhaps there is something more juicy on the way ahead of that?
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.
