Forget the 12 days of Christmas; this is the 12 FTSE AIM shares with a strong chance of staging a Santa’s rally and providing investors with a well-deserved Christmas present after a tough year for UK small-caps.
We have highlighted 12 AIM shares we feel have the potential to close 2023 at a higher point than they were trading 1st December.
UK small-caps are inherently higher risk than larger-cap shares and may not be suitable for all investors. This article is not advice.
Big Technologies
Big Technologies provides monitoring services for individuals through a SaaS model used in healthcare and criminal justice applications. In the half-year ending 30th June, Big Technologies’ revenue grew to £27.3m from £22.9m in the same period a year prior. Adjusted EBITDA increased to £16.1m from £13.7m. Subsequent to the results, Sara Murray, Chief Executive Officer of Big Technologies, purchased around £200,000 worth of the stock at 195p.
Shares have since dipped but are starting to form a gentle uptrend, which could take the stock higher during December.
Van Elle Holdings
Van Elle shares have been undulating in a range since the beginning of 2022 and are currently trading above a support level, which has been held on three occasions over the past two years. On each occasion, the company staged 20%-30% rallies. Despite a challenging economic environment, the groundwork company saw revenue grow to £148m in the year to 30th April and has since said trading is in line with expectations, although profit expectations are lower than last year.
The Van Elle said it has a strong pipeline of Canadian construction projects and has recently acquired a piling business with £10m revenue per year.
From a valuation perspective, it trades at just 8.3x historical earnings.
Tekcapital
Tekcapital has pushed back the proposed listing of their portfolio company, MicroSalt, until mid-December. The listing of MicroSalt could confirm the value of Tekcapital’s portfolio of readily realisable technology companies trading on major exchanges is worth far more than the current market cap. Tekcapital’s management said they saw multi-million revenue for their portfolio companies in 2024, promising a step change in investor sentiment when this is achieved.
Tekcapital shares have dropped below 10p in recent weeks and are primed for a recovery during the festive season.
Angling Direct
Angling Direct has around a 12% market share of the UK angling market, and its revenue has grown 4x since its IPO in 2017. Despite revenue growing exponentially, at 40p, the group’s shares are well below the listing price. This has been picked up by Kelso Group, who took a 3% stake in the business at the end of November. One would expect this to grab the market’s attention and support a rally through December.
Greatland Gold
Greatland Gold investors are awaiting an updated MRE (mineral resource estimate) for the Havieron gold project in Australia. The project holds one of the biggest gold discoveries of recent years. It could be about to get bigger. If the update MRE unveils a major increase in the resource, one would expect shares to tick nicely higher and provide GGP holders with an early Christmas present.
Fusion Antibodies
Fusion Antibodies provides antibody engineering services for the discovery and development of antibodies to be used in drugs and therapies. The company has a blue-chip client base and has developed over 250 antibodies.
Fusion Antibodies has recently announced an important agreement with a US government agency that will provide further insight into their OptiMAL® antibody platform at little cost to Fusion. Should the tests be fruitful, the sky is the limit for Fusion’s shares, although investors are in for a wait for results. Anticipation could well send shares higher through December. The company is revenue-generating, although a recent trading update revealed revenue would be behind market expectations in the current half-year.
Cadence Minerals
Cadence Minerals is in for an exciting 2024. Cadence recently announced that the licensing process for company’s Brazilian flagship Amapa iron ore project had been accelerated, meaning the new year could see a volley of developments as the project moves towards restarting production.
Anglo American once valued the Amapa mine at more than $600m. Cadence has a 30% interest in the asset and an option to increase its stake. Cadence also has investments in rare earths and lithium, promising positive updates in the coming year.
RWS Group
Intellectual property and technology company RWS Group has rolled out AI-enabled services this year, and we’ll learn more about the new offering’s traction in December. In a year-end trading statement released in October, the company said it was enjoying growth in many business areas but saw revenue falling circa 2% for the period. Shares sank but have since recovered. RWS Group is due to publish preliminary results 12th December and will provide further insight into the year ahead.
Power Metal Resources
Power Metal Resources shares are on their knees, and if a Santa’s Rally can’t pick the share price up, it’s difficult to see what will. The company has a diverse portfolio of mining assets, both geographically and in terms of minerals. Most recently, Power announced positive exploration results from their Canadian uranium prospects. Power Metals shares may prove to be a great stocking filler for mining enthusiasts.
ECR Minerals
We recently summarised ECR Mineral’s upcoming activities on a UK Investor Magazine podcast. We should learn more about these activities during December, and one would think any positive developments would send shares higher into the new year. Listen to the Podcast here.
Boohoo
Boohoo have had a torrid time in 2023. However, starting from a low base, investor sentiment around Boohoo shares is starting to improve. The company still has a lot of progress to make in its turnaround strategy, which promises better news in the coming reporting season than investors have become accustomed to this year. Investor positioning for a better 2024 could see Boohoo involved in any end-of-year rally.
CleanTech Lithium
Lithium companies have been dogged by lower carbonate and hydroxide prices during 2023 and CleanTech shares now trade at just 21p after nearly reaching 90p in early 2023. The company has recently raised £8m to fund the development of their lithium brine projects. Investors are gearing up for strong newsflow in 2024 as the company releases early results from pilot direct lithium extraction projects.
