There’s something paradoxical about the idea of an Alternative Investment Market (Aim) leader board. The junior exchange was never designed to create a static hierarchy of mini blue-chips; the whole logic of the market was meant to encourage and enable growth, movement, and – that hallowed prize – a possible graduation to a spot on the premium list.
Because Aim is home to companies in their growth stage, it stands to reason that both volatility and capital-raising should play a disproportionate role in the movements of the top stocks (at least compared to the composition of the FTSE 100).
In one sense, that trend is in evidence. Around a quarter of the companies profiled in this year’s Aim 100 weren’t there last year, with Secure Income REIT (SIR) the highest debutante following March’s £382m placing to fund the purchase of a portfolio of leisure and hotel assets. Most of the resources stocks in this year’s top 100 are making their first appearance, largely aided by successful equity placings. Collectively, they take the place of three larger peers who have moved on since last April: Yorkshire potash hopeful Sirius Minerals (SXX) and Ecuadorian copper-gold outfit SolGold (SOLG), both of which are now listed on the main market, and Ithaca Energy, which folded into Delek Group.
Despite a good year for commodity stocks generally, disappointing operational performances meant index exits for Texan driller Pantheon Resources (PANR), gold miner Pan African Resources (PAF) and will-they-won’t-they takeover hopeful San Leon Energy (SLE).
Given the often rapidly shifting fortunes of Aim’s largest companies, it is somewhat surprising to see quite so many stocks reappear in the list with their position largely intact. More than a third of this year’s returning class have dropped or risen by no more than seven places, and a half of the entire list are within 14 spots of their 2017 ranking.
There were a few dramatic falls – sentiment (and profit)-hit recruiters Impellam (IPEL) and Staffline (STAF), and sustainable fishing outfit Benchmark (BMK) among them – and a greater number of big risers, most notably Blue Prism (PRSM), which continued the ascent that catapulted it onto last year’s list. That may not come as much of a surprise, after a year in which the threat and business opportunity of automation became a mainstream investment theme, although we continue to view the highly rated shares as a risky bet, given the expectations of continued cash burn. Fellow blue-sky technologists XL Media (XLM) and IQE (IQE) also had strong runs over the course of the year, although sentiment towards the latter remains checked by questions over its reliance on Apple, and several bearish research reports.
In the pages that follow, we pick through the prospects for the junior market’s top 50 stocks, by market capitalisation.
