Best AIM stocks to consider buying in October

We asked our writers to share their best AIM-listed stocks to buy in October, featuring a Hidden Winners recommendation!

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

We asked our freelance writers to share their top ideas for stocks listed on the Alternative Investment Market (AIM) with investors — here’s what they said for October!

[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]

Creo Medical   

What it does: Creo Medical is a medical devices company that makes instruments used in endoscopic surgery.    

Should you invest £1,000 in easyJet right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if easyJet made the list?

See the 6 stocks

Created with Highcharts 11.4.3Creo Medical Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

By Ben McPoland. I think shares of Creo Medical (LSE: CREO) look interesting after falling 42% this year. The innovative small-cap company manufactures devices that enable minimally invasive surgical procedures.

Last year, it more than doubled its user base and analysts expect revenue to jump 28% this year to around £39.6m. Its recently launched Speedboat UltraSlim, a device compatible with most endoscopes, is expected to drive further sales momentum in the years ahead. 

On 18 September, Creo announced the sale of 51% of its European business to China’s Micro-Tech (a leading endoscopic instrument company). If approved, this will net the firm approximately €36.7m, which it will use to fund its growth.

Creo says this deal will “support our continued commercial growth in the [Asia Pacific] region through product registration and co-branding in China.” Opening up opportunities in the massive Chinese healthcare market could prove to be very lucrative.

The main danger here is that the company’s still in growth mode and not yet profitable. It has a cash-flow break-even target for 2025, but the lack of earnings still heightens risk. 

Nevertheless, with the market cap now at £95m (as I write), the stock looks attractive to me given the growth potential.

Ben McPoland owns shares in Creo Medical.

hVIVO

What it does: Specialist contract research organisation (CRO) focused on human medical trials of vaccines and antivirals.

Created with Highcharts 11.4.3hVIVO Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

By Mark David Hartley. hVIVO (LSE: HVO) is a clinical research organisation that serves biopharma companies. It recruits volunteers for clinical trials through its FluCamp database, which boasts over 320,000 participants. It can be a risky business, as clinical trials face the threat of medical complications or even fatalities. This could cause reputational and financial damage to the company. 

The company’s latest results revealed a 30% year-on-year increase in revenue and 67% EBITDA growth, translating to a 24.5% margin. Basic adjusted earnings per share also saw a 30% increase. However, with a price-to-sales (P/S) ratio of 3, revenue is lagging the share price. 

Still, its balance sheet looks solid, with cash up from £31.3m to £37.1m in H1. Looking ahead, management anticipates an 11% increase in full-year revenue with a projection of at least £100m in revenue by 2028. That’s a compound annual growth rate of about 14%.

Mark David Hartley does not own shares in hVIVO.

Serica Energy

What it does: Serica is one of the top 10 oil and gas producers in the UK North Sea, with an output of more than 40,000 barrels per day.

Created with Highcharts 11.4.3Serica Energy Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

By Roland Head. Shares in North Sea oil and gas producers have been hammered by the falling oil price and uncertainty over government energy policy. Serica Energy (LSE: SQZ) is no exception.

The company’s share price has fallen by 40% so far this year. The shares now trade on just three times forecast earnings, with an 18% dividend yield.

The Autumn Budget on 30 October may provide some welcome clarity. In the meantime, we know that Serica had $131m of net cash at the end of June.

Serica’s projections suggest that the company could generate another $500m of surplus cash from its current production by the end of 2027.

My main worry is that management may blow some of the group’s cash pile on a misguided foreign acquisition.

However, the company recently confirmed its support for the dividend, declaring an unchanged interim payout. I think the shares just look too cheap right now.

Roland Head owns shares in Serica Energy.

Warpaint

What it does: Warpaint sells colour cosmetics under its own brands, W7 and Technic. It sells through major retailers and via its own website.

Created with Highcharts 11.4.3Warpaint London Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

By Harshil PatelWarpaint (LSE:W7L) is going from strength to strength. Not only are sales and profits rising, but its profit margin is too.

Achieving this hat-trick is impressive and it’s what makes this AIM stock stand out from the crowd.

Its half-year pre-tax profit jumped by 76% from £6.2m to £10.9m. The company’s sales are weighted towards the second half of the year due to its gifting attributes. So, I’d expect more growth to come.

There are plenty of opportunities, both from existing retailers and through new major shops which it is currently in discussion with.

Warpaint offers many of the qualities that I look for in the best shares. Namely, it offers a return on capital employed of 42%, over 20% operating margin and a solid balance sheet.

There is competition in this space, but it looks like it’s taking market share from rivals.

I wrote about this Aim stock a year ago, and although its share price has doubled since, I still like it today.

Harshil Patel owns shares in Warpaint.

YouGov

What it does: YouGov is a British internet-based market research and data analytics firm with global operations.

Created with Highcharts 11.4.3YouGov Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

By Muhammad Cheema. YouGov’s (LSE:YOU) 2024 has been torrid with its shares falling by almost 62%. Investors were particularly spooked by a profit warning in June, which caused a one-day drop of 46%. Debt of £214m on its balance sheet is also risky and doesn’t ease concerns.

However, I believe this has been blown way out of proportion. On its later trading update on 6 August, it guided for revenue of £327-330m and operating profit of £43-46m. For context, FY23 revenue and operating profit were £258m and £44m, respectively.

This doesn’t warrant the share price fall in my opinion and presents a potential buying opportunity for investors to consider. Revenue growth remains strong and even though earnings are broadly in line with last year, historically the company has a strong track record of increasing this. This might just be a blip in performance, especially as the firm is in a great position to capitalise on the rise of AI.

Muhammad Cheema does not own shares in YouGov.

Should you buy easyJet shares today?

Before you decide, please take a moment to review this first.

Because my colleague Mark Rogers – The Motley Fool UK’s Director of Investing – has released this special report.

It’s called ‘5 Stocks for Trying to Build Wealth After 50’.

And it’s yours, free.

Of course, the decade ahead looks hazardous. What with inflation recently hitting 40-year highs, a ‘cost of living crisis’ and threat of a new Cold War, knowing where to invest has never been trickier.

And yet, despite the UK stock market recently hitting a new all-time high, Mark and his team think many shares still trade at a substantial discount, offering savvy investors plenty of potential opportunities to strike.

That’s why now could be an ideal time to secure this valuable investment research.

Mark’s ‘Foolish’ analysts have scoured the markets low and high.

This special report reveals 5 of his favourite long-term ‘Buys’.

Please, don’t make any big decisions before seeing them.

Claim your free copy now

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 assessed. Consider taking independent financial advice.

The Motley Fool UK has recommended Warpaint London Plc and YouGov Plc. 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.

More on Investing Articles

Mindful young woman breathing out with closed eyes, calming down in stressful situation, working on computer in modern kitchen.
Investing Articles

Up 5% in the last crazy week! Are these 2 income stocks the ultimate FTSE defensive plays?

Harvey Jones picks out two FTSE 100 dividend income stocks that have actually climbed while stock markets are heading in…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

2 beaten-down UK shares that now look really cheap

Looking for cheap shares to consider for the long term? These two British stocks offer a lot of value right…

Read more »

Middle-aged white man pulling an aggrieved face while looking at a screen
Investing Articles

As stocks tank, is this a rare chance for ISA investors to get rich?

Shares have collapsed globally and valuations are becoming, on paper at least, a lot more attractive. Dr James Fox explores…

Read more »

Investing Articles

2 strong FTSE 100 dividend shares to consider as recessionary risks increase

Looking for secure passive income stocks to consider buying as thumping trade tariffs loom? Here are two FTSE 100 dividend…

Read more »

Investing Articles

Can Greggs shares offer shelter from Trump’s tariff chaos?

Greggs' shares have plummeted in recent months. But with very little exposure to the US or tariffs, could the stock…

Read more »

Investing Articles

Income of almost 12%! 3 stunning FTSE dividend stocks now have double-digit yields

Harvey Jones is amazed by the sky-high income on offer from these FTSE 100 dividend stocks, but he's also aware…

Read more »

Investing Articles

As vehicle sales slump, should I buy Tesla stock on the dip?

Andrew Mackie assesses whether Elon Musk’s political leanings are destroying the Tesla brand or is now the time to be…

Read more »

Dividend Shares

Why this stock market correction is great for passive income investors

Jon Smith explains why those looking for passive income from dividends could benefit from the move lower in stock prices…

Read more »