3 AIM growth stocks I’d buy today

The UK’s Alternative Investment Market can be a great place to look for growth stocks. Here are three AIM stars Edward Sheldon likes right now.

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The London Stock Exchange’s Alternative Investment Market (AIM) can be a great place to look for growth stocks. In this area of the market, many companies are growing at a phenomenal speed.

Here, I’m going to highlight three AIM growth stocks I like the look of right now. All three have pulled back recently so I think it’s a great time to buy.

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A star AIM stock

One that strikes me as a buy today is online fashion retailer ASOS (LSE: ASC). It share price has climbed higher over the last year as the company has benefited from increased spending online. However, I think the growth potential here remains substantial. Realistically, online shopping is still in its early days.

ASOS posted an excellent trading update last week. For the four months to 31 December, total retail sales increased 24%. The company also advised that full-year profit before tax is likely to be at the upper end of market expectations.

However, in a classic case of ‘buy the rumour, sell the news’ the stock has fallen over 10% since this update. I view this pull back as an excellent buying opportunity. The forward-looking P/E ratio is now just 35, which I see as a very attractive valuation.

A cybersecurity play

A second AIM stock I like right now is GB Group (LSE: GBG). It’s a leading provider of identity management and fraud prevention solutions. In today’s world, in which online fraud is increasing at an alarming rate, I see GBG well-placed for success.

The group posted a good set of half-year results in December. For the six months ended 30 September, revenue was up 10% while adjusted operating profit jumped 25%. Meanwhile, the company said it has a “significant market opportunity” supported by accelerating structural growth drivers.

GBG is well-positioned as digital acceleration is now even more a necessity for all companies. For the consumer-facing businesses we serve, key to their success will be making sure they know who and where their customers are,” commented CEO Chris Clark.

However, its shares aren’t cheap. Currently, the forward-looking P/E ratio is about 44. That lofty valuation does add risk.  But, overall, I think the long-term risk/reward profile here is attractive.

An AIM video game champion

Finally, Keywords Studios (LSE: KWS) is another AIM growth stock I’d buy right now. It’s a leading provider of technical services to the video game industry.

Video gaming has come a long way over the last few decades. Not so long ago, it was a niche hobby. Today, it’s one of the most dominant forms of entertainment across the world. Believe it or not, gaming now brings in more revenue globally than movies and music combined.

Looking ahead, the gaming industry is predicted to keep expanding rapidly due to advances in technology and the growth of e-sports. The industry growth should benefit Keyword Studios. This year, revenue is forecast to climb about 20%.

I last wrote about Keywords Studios in mid-November. After that article, the stock rose about 40% in the next six weeks. However, this year, it’s given back some of those gains. After the recent pull back, the forward-looking P/E ratio is about 43, which is expensive but not outrageous, in my view. I’d buy this AIM growth stock today.

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Edward Sheldon owns shares in ASOS, GB Group and Keywords Studios. The Motley Fool UK has recommended ASOS and Keywords Studios. 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.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

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