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AIM Portfolio

Honest reporting on shorter-term trading activity and ideas
Argadargada
Posts: 13
Joined: November 4th, 2016, 11:56 am

AIM Portfolio

#424

Postby Argadargada » November 4th, 2016, 8:18 pm

Not sure if this is the right board for this but I'm hoping to make a million somehow and part of that will, hopefully come from a portfolio of AIM shares.

Some background. I already have a portfolio of ITs and also a "Growing Dividend Portfolio" of individual shares. I'm retired, have a couple of small index-linked and partially index-linked pensions plus the old age pension. So, this is only going to be a small part (maybe 10% of my overall portfolio).

Okay, down to the nitty-gritty. I already hold 3 AIM shares. Why AIM? Well, for a start no stamp duty (like Channel Island-based ITs) and the smaller companies, some spin-offs from our great universities, seem to be under-researched by the "Wise" and therefore offer an opportunity for us mere mortal punters to make our fortunes! My 3, so far:

Alliance Pharma (APH) Reason is that they are not a biotech with huge start up costs but a company which is, in some respects, quite "old fashioned", their expertise lies in the acquisition and licensing of pharmaceutical and healthcare products, which could be classified as "old fashioned" stuff your grandma probably used e.g. Lypsyl (lip balm and cold sore treatment) but which still have a demand. Last year they bought Sinclair Pharma, which operated in the same field but had financial difficulties. The company now sells in over 100 countries and, whilst it won't get me to a million quickly, despite the dividend being hiked by 10%, I might need some of its products in my dotage.

http://alliancepharmaceuticals.com/en-gb/home

Bioventix (BVXP) Reason is that, again, they are not a true biotech with all the start-up costs, but kind of a middle-man for other biotech companies. They manufacture sheep bioclonal antibodies. Don't ask! The facts that drew me to them was that they hiked the interim dividend by 50% !!!, they have a margin of 90+% and they have net cash and only 13 employees.

http://www.bioventix.com/index.htm

EMIS (EMIS) Reason being it markets software that links doctors, NHS hospitals and pharmacies so that patient information is available to all. It is another company with net cash and has increased their dividend by 15%.

https://www.emisgroupplc.com/who-we-are/what-we-do/

I think that I have enough pharma/healthcare companies for the time being and am looking for suggestions in other areas like technology but not limited to tech. My requirements in an AIM company are a "moat", net cash a high margin and a rising dividend, ideally. I realise that the potential for loss is higher than "mainstream" shares, but the potential for higher gains is also there. A risk I am willing to take as I believe that there are some brilliant British companies hiding in the AIM market that I need to support in the hope that they will, in turn, support me in my quest for that illusive million.

Any suggestion?

Argadarga

Argadargada
Posts: 13
Joined: November 4th, 2016, 11:56 am

Re: AIM Portfolio

#471

Postby Argadargada » November 4th, 2016, 9:15 pm

Thanks ap8889,

It's good to get some feedback from someone actually using the software. Like most investments I make, I don't have first hand experience of the product or service, so it is invaluable to get an "insider's" perspective on their wares. I gather that the company (EMIS) grew out of a North Yorkshire GPs practice originally. So, they look like they had identified a gap in the market. Let's hope your feedback to the company will result in refinements to improve the software or its interoperability. In a previous life I used to design algorithms for software systems which were safety critical and the number of arguments I had with programmers who didn't understand our requirements was legendary. I can imagine the conflicting requirements of the EMIS software users. Only by giving feedback to the manufacturers can you hope to get an improvement. I'll have to keep an ear open for any other problems, but thanks for the "heads up".

Arga

Asagi
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Re: AIM Portfolio

#506

Postby Asagi » November 4th, 2016, 10:10 pm

Argadargada wrote:EMIS (EMIS) Reason being it markets software that links doctors, NHS hospitals and pharmacies so that patient information is available to all. It is another company with net cash and has increased their dividend by 15%.


I am also a 'fan' of EMIS. If anything you might be underselling it.

Market cap: £514m, yield 2.9%, shares near a two year low.

Dividend growth in the last five years averaging 13.6% per annum.

I personally own The Mission Marketing Group (TMMG), Sigma Capital (SGM), Epwin (EPWN) and Staffline (STAF).

Of these, I feel that Sigma has the most upside potential. I believe that the shares are worth around 100p today but if management continues to execute to plan then I would be ratcheting that target higher.

Epwin is currently a 'square', with the P/E and dividend both around 7. They supply products to the new build housing sector, and repairs/upgrades.

The Mission Marketing Group has debt and deferred liabilities from past acquisitions but is surely worth a bit more than the current share price I'd say.

Staffline is the one I feel most confident about. Shares currently 812p and I expect to sell it at no less than 1,200p within 6 months.

Have you ('tip' coming up here!) considered Maintel (MAI). EPS and dividend rising each of the last five years at an average of 18.8% and 28.1% a year respectively. Big acquisition recently, 2017 P/E is 10.6. Calendar year end, so we are about to enter the trading period that the 10.6 P/E forecast is good for.

Also remember that chasing big wins on AIM normally ends in tears....

Regards,

Asagi

(long TMMG, SGM, EPWN, STAF)

Argadargada
Posts: 13
Joined: November 4th, 2016, 11:56 am

Re: AIM Portfolio

#648

Postby Argadargada » November 5th, 2016, 9:29 am

Thanks for the "tips" Asagai. I can see I'm in for a weekend of annual report reading, if the rugby doesn't get in the way! :lol: No doubt I'll be back to you with some questions once I've acquainted myself with these suggestions. Thanks again.

Argadargada
Posts: 13
Joined: November 4th, 2016, 11:56 am

Re: AIM Portfolio

#651

Postby Argadargada » November 5th, 2016, 9:36 am

Hi ap, Thanks for the update on EMIS. When I first did my research on them it seemed to me that they had, or were, building a large "moat". That's a good sign, for me. Hopefully they will iron out any peripheral inconsistencies. Financially, I can't see any problems, specially when they have net cash. Always good if they want to buy "bolt ons".

doug2500
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Re: AIM Portfolio

#730

Postby doug2500 » November 5th, 2016, 12:05 pm

Here's some more that might be worthy of further research:

Advanced Medical Solutions
James Halstead
Zytronic
Tracsis
Microgen
Castings
Zotefoams
Goodwin
Trakm8

The only problem is I wouldn't describe any as being cheap. Trakm8 might be, as long as results due soon are okay. Recent weakness may indicate that they might not be.

They might not all be net cash, but they do have strong balance sheets, so finance shouldn't be a problem for any of them.

They would certainly make good long term holds if markets wobble and they could be bought at 20% less, or so.

Such a relief to have somewhere to post.

Argadargada
Posts: 13
Joined: November 4th, 2016, 11:56 am

Re: AIM Portfolio

#755

Postby Argadargada » November 5th, 2016, 1:00 pm

Hi doug,

Thanks for the suggestions. I can see I'm going to have a busy weekend trawling through loads of annual reports, but as it's raining that should be quite pleasurable. I do recognise a few of the names you have mentioned but will need to reacquaint myself with them all. As there are over 800 companies listed on the AIM market, there would appear to be plenty to choose from provided I can avoid the duffers. Thanks again for the suggestions. I'll get back to you with my shortlist once I have about 20 possibilities.

GrahamPlatt
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Re: AIM Portfolio

#806

Postby GrahamPlatt » November 5th, 2016, 3:19 pm

doug2500 wrote:Here's some more that might be worthy of further research:

Advanced Medical Solutions
James Halstead
Zytronic
Tracsis
Microgen
Castings
Zotefoams
Goodwin
Trakm8
.


A good looking list, but ZTF is on the main market.
http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary/GB0009896605GBGBXSSMM.html

We should have an AIM board. Definitely not the stuff of Trading My Way To A Million, this. Not meant to be derogatory that - just the opposite in fact.

Nocton
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Re: AIM Portfolio

#1748

Postby Nocton » November 7th, 2016, 3:58 pm

Solid, steady dividend payers:
Churchill China
NWF
Telford Homes
M&C Saatchi

Growth companies which have grown very well over last few years:
IG Design - suffering a profit-taking sell-off at present, but prospects look good
Dart Group - suffering from malaise in airlines after Brexit, but again prospects look good and and flying from Stansted

Others I like:
Thorpe (FW)
Utilitywise
Clinigen
Anpario

I have holdings in all these.

Nocton

Argadargada
Posts: 13
Joined: November 4th, 2016, 11:56 am

Re: AIM Portfolio

#2132

Postby Argadargada » November 8th, 2016, 12:11 pm

Thanks nocton,

I know a few of these specially Dart Group with their Jet2.com airline plus the Fowler Welch trucking business. I've been following their progress for a few years without taking the plunge. I think it's the airline bit that worries me slightly. I'll certainly have a look at your other suggestions though and thanks again for posting them.

Nocton
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Re: AIM Portfolio

#2193

Postby Nocton » November 8th, 2016, 1:54 pm

Argadargada, you say: "I've been following their progress for a few years without taking the plunge." I find that my solution to this problem is to buy some shares at first and then add to them over the next year or two as the company (hopefully) progresses. By reading the annual reports, perhaps attending AGMs and meeting he directors, and following the company generally, one gains a good understanding of the business. I have owned Dart for many years and bought some shares at 16p! - so one of my best performers. The 16p purchase was at the time of the start of the financial crisis when, a bit like now, everyone was saying that no one would have any money to fly away on holiday. I expect them to recover to well over their previous high of over £6 when the Brexit worries die down. But who can say?

In my learning about AIM shares I have followed the articles by John Lee in the weekend FT. He often has some interesting suggestions, although now his contributions are less frequent than previously.

Nocton

LongbeardRanger
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Re: AIM Portfolio

#3045

Postby LongbeardRanger » November 9th, 2016, 10:13 pm

Argadargada and others,

Excellent thread, and I agree arguably misplaced on "trading my way to a million".

I too have followed EMIS for a while so the insights on this thread are very interesting. I've not yet invested in it, partly as I'm not yet totally comfortable with its cash generation capacity - it definitely generates cash but quite a lot has to be reinvested into software development. I am thinking hard though as valuation wise it is increasingly attractive and there is a lot to like about the business model.

A few of the AIM businesses I hold:

Nichols (NICL) - manufacturer of Vimto, among other soft drinks. Fantastic margins, returns on capital and cash flows, still some family ownership, predominantly UK business but with some export markets (Vimto is popular in the Middle East apparently!). Great company but not cheap at the moment.

RWS - patent and commercial translation providers. Again, fantastic margins and cash flows. Recently made acquisitions that broaden its services from traditional patent translation and filing. Chairman and founder Andrew Brode has the owner's eye. Also not cheap but really high quality.

Young's Brewery (YNGN - I hold the non voting shares). Owner and operator of a fantastic estate of up market London pubs. Contrary to what you might expect from the name, don't actually own a brewery. Again there is a family presence as owners and managers. Another company with a great track record and hard to replicate assets, obviously highly exposed to the fortunes of London (I view this as good but no question it is a risk!). Not unreasonably priced at the moment in my view.

In addition, the likes of FW Thorpe, James Halstead, Accesso, CVS are on my watch list. In aggregate, AIM is very low quality, but there are a few gems, and quite a few good solid companies on it and it's not that hard to pick them as avoid the obvious dross IMV.


Rgds,
Phil

Argadargada
Posts: 13
Joined: November 4th, 2016, 11:56 am

Re: AIM Portfolio

#3121

Postby Argadargada » November 10th, 2016, 8:24 am

Hi Phil, Thanks for the suggestions, some I'm familiar with and others are new to me.

Nicols, I should have bought years ago as when I was a snivelling yoof I grew up on bottles of Vimto. Still like the taste to this day. As you say popular in the Middle East specially around Ramadan time, apparently. One on my buy list.

James Halstead is one that I have recently begun investigating. I didn't realise how big a company it was (close to £1 billion market cap) or how widespread it was with facilities in Australia, Canada, South Africa and even Russia. But as my wife says "how come I've never seen any lorries with that name on the side?" Another perceptive question! More research required, but as they've been around for over 100 years I guess they are not a "fly by night" outfit. One on my watchlist.

The rest I'll need to start researching. Thanks for the ideas and as you say there are some gems to be found amongst the dross.

Nocton
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Re: AIM Portfolio

#3151

Postby Nocton » November 10th, 2016, 9:42 am

Yes, thanks Phil for the suggestions. Like A I have had James Halstead on my radar for some time (years) but always thought it too expensive. I don't like buying with p/e over 20 as such shares are so vulnerable to a re-rating if growth falls back and AIM shares a re particularly vulnerable to sudden shocks. But JH has certainly been a stayer.
Youngs is certainly of interest, but I don't like non-voting shares; with AIM companies I like to attend occasional AGMs, meet the directors and to think I won't be entirely ignored by the board. Also my 'London play' is Telford Homes which pays a nice dividend, has a p/e below 10 and I think has good prospects as it is in the lower-cost sector of the London housing market and tie-ups with some larger companies in the Private Rented Sector or ‘build to rent’ area.
RWS is not a company I have been aware of before, but will certainly follow up the suggestion as it would fit nicely into my AIM portfolio of 15 shares. I am expecting to have some cash to re-invest as one of my cos. is at present in the middle of a take-over offer.

Nocton

Argadargada
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Joined: November 4th, 2016, 11:56 am

Re: AIM Portfolio

#3237

Postby Argadargada » November 10th, 2016, 12:04 pm

Just came upon this piece whilst surfing for AIM companies which I'll leave for comment as most of them are new to me.

http://www.aim-awards.co.uk/shortlist/

LongbeardRanger
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Re: AIM Portfolio

#3272

Postby LongbeardRanger » November 10th, 2016, 1:17 pm

Argadargada wrote:Just came upon this piece whilst surfing for AIM companies which I'll leave for comment as most of them are new to me.

http://www.aim-awards.co.uk/shortlist/


Thanks for the link, there are some interesting companies listed. Keywords Studios (KWS), AB Dynamics, Watkin Jones, Fever tree and Joules are all companies I've heard of and looked at in varying degrees of depth (though not invested in, sadly....).

Both Keywords and Watkin Jones have presented at Mello and there is a video available of their presentations. I'm on my phone at the moment so difficult to post links, but will see if I can dig them out tonight. With Watkin Jones, I felt they were well run and had an interesting business model (with a lot of the financial characteristics I like) but concluded they were too exposed to institutional demand for investment in student property, which I've no real feeling for in terms of how resilient it's likely to be. Strikes me as the kind of thing that could disappear in due course, which would be pretty bad news for Watkin Jones. So that one isn't for me, but Keywords I'm still interested in and AB Dynamics is also on my watch list.

Incidentally, Young's reported good interim results today, revenue and profits up by over 7% and dividend up by 6%:

http://www.youngs.co.uk/data/investors/ ... cument.pdf

Can fully understand why the voting shares would be preferable, but to me the 30% premium to the non voting shares is just too much to pay...

P.s. great discussion, some of these AIM companies have quite low profiles (an investment positive in my view) so it's great to see some discussion of them and share ideas :-)

alterego
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Re: AIM Portfolio

#3317

Postby alterego » November 10th, 2016, 3:04 pm

As well as potential for capital gain, most AIM shares offer a useful bonus feature , i.e they are IHT exempt if held for 2 years. I have accumulated fairly large portfolio of AIM stocks as well as main market ones. This includes the following which I don't think have been mentioned here and although some are not cheap,they are worth consideration IMO.

BREE, EPWN, HAYT, JDG, LTHM, SND, SDM, VTU, WGB

Lootman
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Re: AIM Portfolio

#3327

Postby Lootman » November 10th, 2016, 3:40 pm

alterego wrote:As well as potential for capital gain, most AIM shares offer a useful bonus feature , i.e they are IHT exempt if held for 2 years.


Be careful - only some AIM shares qualify for IHT exemption if held for 2 years. Broadly speaking they are AIM shares that have real products and services. Companies that are really vehicles for finance, property and investment get no IHT exemption.

Worse, an individual AIM share can migrate from being qualifying to non-qualifying and vice versa.

alterego
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Re: AIM Portfolio

#3359

Postby alterego » November 10th, 2016, 4:46 pm

True Lootman, I did say "most" as most are real trading companies not just investment vehicles. Also true they can move to main market and lose IHT exemption but, you can maintain continuity of your own exemption by reinvesting the proceeds of a sale in another AIM stock. This allows you to retain the time period for which the previous stock was held as if the new investment had been bought earlier. Hope that's clear.

Argadargada
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Re: AIM Portfolio

#5780

Postby Argadargada » November 16th, 2016, 10:05 pm

Here's another link for those interested in trawling the "murky depths" of the AIM fishing pond.

http://www.aimprospector.co.uk/uploads/ ... ers_ap.pdf

I'll make no comment as I need to do some more research as most of these companies are new to me.


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