Which AIM Champion Deserves A Place In Your Portfolio? W Resources PLC, Xtract Resources PLC Or Victoria Oil & Gas plc?

W Resources PLC (LON: WRES), Xtract Resources PLC (LON: XTR) and Victoria Oil & Gas plc (LON: VOG) are all top stocks but which should you choose?

| 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.

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.

London’s AIM market has a reputation for being a risky place to invest, and for good reason — you have to be extremely careful where you invest in this highly speculative market. AIM is designed for small companies in the early stages of their lives, and most of these businesses are highly speculative as a result. 

Nonetheless, there are some bargains on AIM that could yield lucrative returns for investors, although singling out these opportunities is tough. W Resources (LSE: WRES), Xtract Resources (LSE: XTR) and Victoria Oil & Gas (LSE: VOG) all look as if they have bright futures, but if you had to pick just one, which should you choose? 

W Resources is a tungsten production, exploration and development company that owns four mines in Spain and Portugal, two of which are being fast-tracked to begin production within the next two years. W Resources is targeting production from the La Parrilla Mine in Spain during 2016, and production from the Régua mine in Portugal during 2017. The company received development approval for its La Parrilla mine earlier this week, so management is confident of hitting the target for initial production next year. When in production, La Parrilla and Régua are expected to have some of the lowest production costs for tungsten in the world. Furthermore, W Resources is targeting revenue of $90m per annum by 2018. 

Xtract Resources has the potential to become one of the world’s premier small-cap gold producers. The company has made staggering progress over the past year improving its prospects, and during September the company acquired the Fair Bride gold project, jacking up Xtract’s resource base to over 1m ounces of gold. However, Xtract’s key advantage is the fact that the company’s cost of production is around $650 per ounce of gold, making it one of the world’s lowest cost gold producers. Gold production is expected to double over the next year and the company recently received a boost from its Chepica Gold and Copper Mine in Chile, which reported revenue growth of 153% to $448k and profit growth of 186% to $150k for the third quarter. 

Victoria Oil & Gas has made solid progress on its strategic goals this year. The company’s gas sales nearly tripled year-on-year over the nine months to the end of September, and gas production doubled during the third quarter. Also, Victoria is planning more drilling activity during 2016, which should see gas production and sales increase further. During the third quarter, group gas production reached an all-time high of 15.2m standard cubic feet per day. And Victoria is cash-rich, which is rare for such a small player in the world of oil and gas. At the end of the third quarter the company had $12.8m of cash, down from $14.2m as reported at the end of the second quarter, but the company reduced debt by $2.4m during the period. In other words, cash generated for the three months to the end of September was around $1m. 

Overall, as Victoria is the only company in this piece that’s cash-rich and generating cash, it looks as if Victoria is the AIM champion that should take a place in your portfolio. 

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.

Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »

Investing Articles

Are HSBC shares a FTSE bargain? Here’s what the charts say!

There are plenty of dirt-cheap FTSE 100 banking stocks for investors to choose from today. Our writer Royston Wild believes…

Read more »

Three signposts pointing in different directions, with 'Buy' 'Sell' and 'Hold' on
Investing Articles

Just released: Share Advisor’s latest ‘Hold’ recommendation [PREMIUM PICKS]

In our Share Advisor newsletter service, we provide buy, sell, and hold guidance for our universe of recommendations.

Read more »

Investing Articles

Investing £5 a day could help me build a second income of £329 a month!

This Fool explains how £5 a day, or one less takeaway coffee, could help her build a monthly second income…

Read more »