The tax year's best and worst AIM 100 stocks
The wipe out of Conviviality Retail (CVR) is a timely reminder about the risks of smaller quoted companies in your ISA portfolio. But as the tax year draws to a close, it’s clear that the past year has been one of progress after the Alternative Investment Market (AIM) outpaced other London indices.
While the FTSE 100 Index (UKX) has fallen in 2017/18, the AIM 100 stood 15% higher at the end of March. There have been some stunning performances, not least from the tech sector after Cambridge-based video games developer Frontier Developments (FDEV)surged 301% and software robot firm Blue Prism (PRSM) jumped 186%.
Frontier, whose games include BAFTA-nominated titles Elite Dangerous and Planet Coaster, has moved from 291p a year ago to as high as 1510p in January.
Sentiment has been boosted by a £17.7 million fundraising in the summer when Chinese entertainment company Tencent took a 9% stake as part of a strategic investment that should help Frontier target the Chinese market.
Broker Peel Hunt recently initiated coverage of the stock with a buy rating and price target of 1400p, while Liberum recently had a target of 1480p.
Blue Prism has a similar share price story to tell. Priced at 78p for its IPO in March 2016, the stock has risen to as high as 1696p at the start of March.
The performance is driven by success in winning new customers in the United States, while it is also branching out into fast-growing markets such as India. The company supplies "software robots" to big blue-chips that allow them to automate routine and mundane back-office tasks, improving productivity.
Spread-betting group Plus500 (PLUS) is up 171% after a year in which it has delivered significant capital returns to shareholders. Dividends and a share buy-back meant it paid out 100% of net profit for 2017, with confidence further boosted by record KPIs in the early weeks of 2018.
Even regulatory fears have not dampened spirits, as the company said new trading rules that clamp down on the issue of binary options and contracts for difference to retail investors would have a 'limited impact' on its expected 2018 financial performance. Plus500 trades on a forecast PE of 7.4x, with a dividend yield of 8.1%.
Other top performers in the AIM 100 in 2017/18 include another gaming group in Keywords Studios (KWS), which has more than doubled in value. The company provides a range of services to video game developers and publishers.
Having recently completed its biggest ever acquisition in Canada, brokers are positive on the AIM stock with Peel Hunt initiating coverage with a price target of 1850p.
Not all technology stocks have fared well, with Internet-of-Things enabler Telit Communications (TCM) losing more than half its value during a challenging year.
Telit hit the headlines last summer when it said chief executive Oozi Cats had resigned from the board after an independent review found evidence of an indictment issued against him in the US. The company is also under investigation by the Financial Conduct Authority over timeliness issues relating to the Israeli's firm's results in August.
But there are pockets of encouragement for Telit, with chairman Richard Kilsby reporting recently that trading for the first two months of 2018 has been considerably stronger than 2017 and ahead of board expectations.
Other fallers include Hurricane Energy (HUR), whose shares have under-performed in 2017/18 despite the prospect of first oil in the first half of 2019 from its Lancaster field.
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|BLUE PRISM GROUP||1,649.31p||0.45%|
|All data 15min delayed as of: 20:14:22 24/05/18|