We requested our freelance writers to share their high concepts for shares listed on the Different Funding Market (AIM) with traders — right here’s what they mentioned for July!
[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]
Ashtead Know-how Holdings
What it does: Ashtead Know-how is a subsea gear rental firm working globally in each offshore wind and oil and gasoline markets.
By Ben McPoland. Given its double-digit dip since Might, Ashtead Know-how (LSE: AT.) inventory now appears engaging to me. In 2023, the agency’s income surged 51% 12 months on 12 months to £110m, with progress throughout all its geographic markets. Adjusted earnings per share (EPS) rocketed 73% to 33.4p.
It additionally acquired ACE Winches in November, bolstering its huge choices of offshore rental gear. That mentioned, acquisitions have elevated its internet debt over the previous few years, which is price maintaining a tally of.
As I write, the inventory’s ahead price-to-earnings (P/E) ratio is about 19. I believe that appears engaging, particularly as The Metropolis sees the corporate’s income practically doubling to £200m by the tip of 2026.
Wanting additional forward, the agency seems to be within the candy spot. Not solely are corporations more and more opting to lease gear to decrease capital expenditure, however the vitality transition means each the decommissioning of oil and gasoline infrastructure and offshore wind markets are tipped for robust future progress.
Ben McPoland owns shares of Ashtead Know-how.
James Halstead
What it does: James Halstead is a producer and worldwide distributor of ground coverings
By Paul Summers. The AIM isn’t precisely overburdened with high-quality corporations however there are just a few diamonds within the tough. One instance, in my opinion, is ground masking specialist James Halstead (LSE: JHD).
Having generated persistently wonderful returns on the cash it places to work, this agency has delivered nice beneficial properties for long-term holders.
That mentioned, the final two years have been powerful for the share value as inflationary pressures have kicked in.
However I believe we’re previous the worst. Supporting this, the corporate introduced in March that pre-tax revenue had climbed 18% to £27.4m for the second half of 2023.
At a fairly costly valuation of 19 instances forecast FY25 earnings, issues may get nasty if I’m incorrect.
Then once more, a robust stability sheet suggests Halstead ought to be capable of climate any additional storms. There’s a chunky 4.5% dividend yield too.
I reckon that is one to contemplate tucking away.
Paul Summers has no place in James Halstead
Volex
What it does: Volex is a producing firm that specialises in energy cords and knowledge transmission cables. It serves clients within the knowledge centre, shopper electronics, healthcare, and electrical automobile (EV) markets.
By Edward Sheldon, CFA. One funding theme I’m actually enthusiastic about proper now could be the worldwide knowledge centre buildout. Internationally, giant know-how corporations are constructing knowledge centres in all places to deal with the large quantity of information being generated immediately (and use it for issues like synthetic intelligence).
Volex (LSE: VLX) strikes me as a good way to play this theme. A producing firm, it generates a good chunk of its revenues from the manufacturing of energy cords and knowledge transmission cables for knowledge centres.
And gross sales from this aspect of the enterprise are rising quick. In H1 FY2024, for instance, revenues in its ‘Advanced Industrial Know-how’ division grew by an enormous 30.1% on an natural foundation to $101m (about 25% of complete revenues).
It’s price noting that gross sales in its different divisions haven’t been rising as shortly. In H1 FY2024, revenues from its EV division really declined. Low or detrimental progress from these divisions may very well be a threat going ahead.
With the inventory buying and selling at a low earnings a number of, nevertheless, I like the chance/reward setup.
Edward Sheldon owns shares in Volex
