We asked our freelance writers to share their top ideas for stocks listed on the Alternative Investment Market (AIM) to buy with investors — here’s what they said for April!
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boohoo.com
What it does: boohoo.com is an online fashion retailer, and owns a number of well-known UK brands.
By Alan Oscroft. Yes, I’m going for it. I’m picking boohoo.com (LSE: BOO), the stock that burned me in the past. Twice. I bought, the price fell, I bought more… and the rest is painful history.
At the interim stage, the bottom line showed a loss, but we did see adjusted EBITDA of £31.3m. And analysts expect boohoo to be back in profit by 2026. The board also told us it’s identified £125m in cost savings, which should be delivered in 2024 and 2025.
The cash situation looked fine, with a “liquidity position of £290m.“
There are fears about the environmental damage done by the fast fashion business. And with competition so intense, boohoo might not make it back. It’s long lost any first-mover advantage it once had.
But if we see positive earnings by 2026, I think it could be a profitable buy. Big risk, though, and I wouldn’t put much (more) into it.
Alan Oscroft owns boohoo.com shares.
Cerillion
What it does: Cerillion is a software business that provides billing, charging, and customer relationship management (CRM) solutions, predominantly to telecoms firms.
By Edward Sheldon, CFA. Shares in software company Cerillion (LSE: CER) have had a good run in recent years. But I see the potential for further share price gains.
This is a company that is firing on all cylinders right now. For the financial year ended 30 September 2023, revenue, pre-tax profit, and the new customer sales pipeline all hit new all-time highs, and the dividend was increased by 23%.
And looking ahead, management appears to be quite optimistic about the future. “With a record back-order book and strong new customer sales pipeline, this leaves us confident about Cerillion’s growth prospects in the new financial year and beyond,” said CEO Louis Hall in November.
On the downside, the company’s valuation is quite high. So, there’s not a lot of room for error (e.g. a slowdown in revenue growth).
Taking a long-term view, however, I’m very bullish on the AIM stock.
Edward Sheldon owns shares in Cerillion
Yü Group
What it does: Yü Group supplies gas, electricity and water to small and medium-sized businesses (SMEs) across the UK.
By Harshil Patel : Up by a whopping 235%, Yü Group (LSE:YU.) has been the best performing stock in the Aim 100 over the past year.
Share price gains have leaped alongside soaring sales and profits. Sales in 2023 jumped by 65% from the prior year to £460m. Pre-tax profits multiplied almost seven-fold to £39.7m from £5.8m in 2022.
Yü Group focuses on supplying utilities to businesses. And its Digital by Default strategy seems to be working well. It offers busy business owners a quick way to sign up and monitor usage and bills.
Given a price-to-earnings ratio of just nine, it doesn’t look expensive just yet. That said, this is a competitive sector. And customers can be price sensitive. I’d carefully monitor Yü’s progress and be alert for any slowing growth.
That said, this Aim company is seeing strong bookings continuing into 2024, which sounds promising. I reckon it could continue to gain market share.
Harshil Patel does not own shares in Yü Group.
