Hot small-cap picks from the experts

This article is part of
AIM and Small Caps - December 2013

With so many AIM-listed and small-cap stocks to choose from, Investment Adviser has picked the brains of some experts for their front runners.


Graham Spooner, investment research analyst at The Share Centre, selects three stocks from the AIM market:

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• Monitise

“As a creator of mobile banking and payments services, Monitise’s global ambitions have been helped by a number of acquisitions in the past financial year. There has also been renewed interest in the company as it completed new deals with IBM and Telefonica. Monitise continues to head in the right direction, with the shares up more than 90 per cent since our first recommendation.”

• Amerisur Resources

“As this is a small oil and gas exploration firm operating in a potentially unstable region, it represents a very high risk investment. The company has made significant progress in recent years, turning exploration projects into productive assets. The target is to double the 2012 production rate by the end of 2013. With production increasing at a rapid rate, the company is expecting to build on last year’s performance with net margins expected to be in the region of 45 per cent.”

• Avingtrans

“Avingtrans is aiming to establish a niche for itself in the precision engineering supply market and has been a beneficiary of the booming aerospace industry – its latest contract with Rolls Royce is worth £55m.”


John Leahy and David Stormont, managers of the Hermes UK Small & Mid Cap Companies fund, offers three ideas from the small-cap sector:

• Henry Boot

“Founded in 1886 and the first listed house builder on the London Stock Exchange, Henry Boot has activities ranging from investment property to construction. Its core activity is trading land – either acquiring land outright or through options. Henry Boot takes land through the complexities of the planning process and sells it on to house builders upon receiving consent.”

• Goal Soccer Centres

“Goal Soccer Centres is a leading national operator of five-a-side soccer facilities, with 43 centres in the UK. There has been a boom in five-a-side. This company is attractive due to the high barriers to entry as well as its cash generation. A £2m investment in facilities and pitches at each centre should generate roughly £500,000 per annum.”

• Lavendon

“Lavendon, a market leader in the rental of powered aerial work platforms, overstretched its balance sheet going into the financial crisis – with £300m of borrowings and a net debt/equity of more than 200 per cent.

“However, the announcement of a £150m refinancing in early 2012 put the business on a firmer footing and prompted us to take a meeting with the company.”