Business

AIM Stocks with Massive Potential

The AIM, or Alternative Investment Market, is a London Stock Exchange sub-market that was established in June 1995.

The AIM allows smaller businesses to access cash by listing on a public market, allowing them to develop more quickly. However, because of the lax oversight and listing procedures, the firms listed are viewed as riskier investments.

There are also numerous well-known firms listed, such as Boohoo Group, which has a market capitalization of £3.77 billion, and Asos and YouGov, both of which are AIM stocks.

Ten firms were listed on the AIM at the time of its introduction, with a total worth of around £82 million. It presently has roughly 850 listed firms with a total market capitalization of £104 billion.

So, which are the best AIM shares to buy? Here are some of the most viable options:

Anglo Asian Mining

Anglo Asian Mining is an explorer and producer of gold, copper, and silver in Azerbaijan. With a market capitalization of roughly £150 million, it’s a relative newcomer to the industry. The shares have come a long way since hitting a low of less than 4p in 2016, but have moved in a broad range over the last year, with a low of 70p in March and highs of 175p. Annual metal output is expected to be in the range of 68,000-72,000 gold equivalent ounces.

The firm revealed to the stock market that its Vejnaly contract region had been “liberated” after the recent war between Azerbaijan and Armenia. Although the miner has the right to explore the mineral-rich territory, it has been under Armenian authority since the Soviet Union’s disintegration. As a consequence, it’s likely that the market hasn’t given this region’s potential any weight, despite the fact that Anglo Asian Mining might be a smart bet on a rising gold price in any event. The price-to-earnings (p/e) ratio of ten is low, but keep in mind that this might be due to investors taking into consideration the region’s volatility.

tinyBuild

TinyBuild (LSE: TBLD), a video game developer based in the United States, is another new AIM stock that investors should keep an eye on. Its goal is to forge long-term collaborations with creators and monetize successful games across several platforms. One example is the puzzle game Hello Neighbour.

Gaming is still a hot industry that is expected to keep developing at a quick pace for the foreseeable future. There are no assurances that tinyBuild will do well, as there are with other stocks. Its stock is likewise valued at 49 times expected earnings. Only the most optimistic market players will consider such a valuation realistic.

A modest ‘free float’ indicates that the price may be volatile in the future.

On the plus side, tinyBuild’s founders still retain significant stock, implying that their interests are aligned with those of their investors. The company also has a solid balance sheet, which is something I look for when buying small-cap stocks.

Fonix Mobile

Fonix Mobile (LSE:FNX), a cellular payments and messaging company, allows businesses in the media, charity, digital services, and gaming industries to charge customers’ mobile bills.

Trading is currently profitable. Over the second half of 2020, revenue and gross profit both increased by 25% and 22%, respectively. More growth is projected in 2021, thanks to a customer backlog.

Fonix has a frighteningly high return on capital employed (ROCE), in addition to being in a fast developing location. Companies that can regularly accomplish this produce a lot of value for their shareholders.

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