The Aim 100: 50 to 1

This week we continue our countdown of Aim’s largest 100 companies – and as this week’s final 50 demonstrate there’s nothing especially diminutive about many of the companies on London’s junior market, either in pure capitalisation or, more importantly, the strength of their prospects.

Growth, after all, is what most investors come to Aim for – and even the market’s biggest company is still increasing its sales and profits at a fair clip despite over a decade of double-digit increases on both fronts. Whether the online retailer in question can continue that record and live up to its stellar valuation is the big question – but the more than 800-fold increase in its share price since it floated just over a decade ago is a great example of what investors are looking for on Aim, a market that has become all the more attractive now that junior market shares can be held in an Isa and those gains protected from capital gains tax.

However, as some pointed out at the time the restriction on Aim shares in Isas was lifted last year, that same change also means any tax losses on Aim shares held in the tax wrapper can no longer be offset against gains elsewhere. That means it still pays to take a selective approach when buying Aim shares, many of which have often enjoyed healthy gains only to give them up when reality gets in the way of the growth story, or investor enthusiasm for high-risk growth plays wanes – as it is across the technology and biotech sectors at the moment, and as it did across junior resources plays over the past year or so.

Certainly, many of Aim’s largest 50 companies have enjoyed stellar performances over the past 12 months and now trade on heady earnings multiples – in the context of the market’s current ‘risk-off’, that could well lead to some profit-taking. Yet there is still plenty of value on offer, especially in currently unloved activities such as gold mining or frontier oil exploration. And if there is a pull-back in the share prices of Aim’s largest companies, that could mark an attractive entry point for anyone that missed last year’s bumper gains, which saw 12 of the 50 largest companies more than double in size.

When that moment comes, as history suggests it will, it will pay to be prepared – and we hope that our Aim review gives you the head start that you need to dig out those bargains.

50-41: IGas Energy to Young & Co's

40-31: Iomart to Avanti Communications

30-21: Max Property to Blinkx

20-11: Clinigen to Amerisur Resources

10-1: James Halstead to ASOS

Aim 100:100 to 51

Ranking correct as of 27 March, price data correct as of 14 April. Source: Thompson Datastream