Sirius Minerals shares in freefall! I’d buy this hidden gem instead

I think this share price will wipe the floor with embattled Sirius Minerals plc (LON: SXX) and here’s why.

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It’s been a bit of a rollercoaster ride for the backers of ambitious wannabe miner, Sirius Minerals (LSE: SXX). The share price crashed in August because of the postponement of a vital bond offering that is needed to unlock major financing from JP Morgan to the tune of $3.8bn – without which the entire viability of the company is brought into question. 

Profitability is still some way off for the firm. This is why it is reliant on fundraising, which is fine until the money starts to run out, at which point the company could get into some serious hot water. 

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Investing in the firm is inherently risky. There is still the potential for massive rewards for backers. It could still complete the fundraising and so far it has only encountered a nerve-wracking setback rather than a final nail in the coffin. Investors often fret about things that get resolved, so it could be that Sirius bounces back in the coming months. But there are no guarantees. This is why I would personally far rather put my hard-earned money into this next share that I think is a hidden gem.

A unique business

FDM Group (LSE: FDM) is a supplier of IT consultants – referred to as ‘Mounties’. The company says “we work in partnership with our clients to help them achieve specific business objectives through the provision of quality IT and business solutions.” It means recruiting, training and hiring graduates, ex-forces personnel and those looking to return to work after a career break who are then deployed, once they have the skills. to client sites.

The model seems to work very well. For the six months ending 30 June, revenue increased 14% to £134.4m and profit before tax by 9% to £24.9m. The company is moving into new countries such as The Netherlands and Australia while also diversifying its client base away from financial services. I think both the geographic and client base expansion are good news for investors and should allow the company to grow further.

Going international

FDM is doing very well in North America where Mountie revenue for the six-month period to 30 June grew by 22% to £46.5m. This has led to increased training capacity in the US with it running rolling pop-up training centres in Austin and Charlotte during the period as it looked to establish a footprint in those areas. In addition to having training facilities, it created a dedicated recruitment hub in Charlotte focussed on recruiting graduates from across the US.

Other regions also contributed to the growth. In EMEA, Mountie revenue for the six-month period grew by 15% to £7.6m. In APAC it rose by 20% to £10.2m. I think growth in all the regions shows management has a good focus on growth and I believe that bodes very well for the future.

The IT services supplier seems to be flying under the radar a bit at the moment and investors looking to maximise their returns might want to consider it ahead of the more volatile Sirius Minerals.

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Andy Ross has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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