The niche biotech group manufactures monoclonal antibodies critical for clinical diagnostics, combining a direct sales business model with downstream royalties. And while cash flows can be occasionally lumpy, dividends have nonetheless been on a steady upward trajectory over the last decade.

So with the yield now sitting at a staggering 8.3%, is this a screaming buy for my ISA?

Inspecting the yield

In its 2025 fiscal year (ending in June), Bioventix made a slight downward adjustment to the dividends paid per share, from 155p to 150p, in line with its cash flow. But despite this, the yield’s shot through the roof, primary as a result of the stock price taking a nasty 43% tumble over the last 12 months.

What happened? There’s a variety of factors at play here. But one of the biggest disappointments in the group’s 2025 results so far was the royalty performance of its troponin antibodies used for cardiac risk assessment.

With troponin now being used beyond investigating chest pains in hospital A&E departments, investors were expecting an uptick in both sales and royalty income. But sadly, that didn’t materialise. And while management’s confident in growth emerging in 2026, investor sentiment’s nonetheless suffered.

The situation in China hasn’t helped matters either. With the Chinese government implementing its ‘China First’ policies, local antibody manufacturers are getting increasingly promoted, making it much harder for Bioventix to compete. And with a large chunk of revenue coming from this region, it presents a significant headwind.

As a consequence, Bioventix’s earnings per share slipped by 6.3% to 143.29p. And since that’s now lower than the 150p paid out in dividends, investors are understandably getting nervous.

A hidden opportunity?

Paying out more to shareholders than the company’s bringing in is obviously unsustainable in the long run. But if revenues and earnings can get back on track, Bioventix’s high yield could indeed be a stellar income opportunity. And right now, there are some catalysts for cautious optimism.

The emerging Alzheimer’s diagnostics market is expanding rapidly and relies on Tau antibodies – something that Bioventix is already capitalising on. In 2025, £605k in revenue was generated from these products, up from £155k the year before. And if management’s outlook on troponin proves accurate, 2026 could indeed see a return to sales and earnings growth momentum.

Of course, forecasts are never set in stone. The use of Tau antibodies is still in a relatively early innings. And the shifting landscape in China could represent a critical structural headwind rather than a temporary cyclical one.

Continued stagnation of troponin antibodies, along with rising competition for its other high-growth potential products, could prevent Bioventix from unleashing its full potential. And, in turn, that could result in dividends falling even further.

The bottom line

Bioventix presents a unique opportunity for my Stocks and Shares ISA, offering both growth and dividend potential. But with a lot of short-term uncertainty, I’m keeping this small-cap stock on my watchlist for now. But if Tau antibody sales continue to accelerate, investors may want to take a closer look.

The post Down 43%, should I unlock this 8.3% yield for my Stocks and Shares ISA? appeared first on The Motley Fool UK.

Bioventix

What it does: Bioventix specialises in the supply of high-affinity monoclonal antibodies for applications in clinical diagnostics

By Paul Summers. There’s not an abundance of quality AIM-listed companies. One exception is arguably Bioventix (LSE: BVXP). The Farnham-based developer and commercial supplier of monoclonal antibodies consistently posts some of the highest operating margins in the entire UK stock market! 

All that said, investor confidence has been knocked after the company disclosed it had overstated revenues. Even though the miscalculation appears to be due to an error on the part of one of its customers, this has pushed the shares down significantly in value as a result of the company now failing to hit analyst expectations.

However, I reckon now is a great time to consider loading up. Bioventix remains a leader in its niche market. The current valuation is also significantly below the firm’s five-year average. While never guaranteed, the dividend yield currently stands at 5.8% and the balance sheet looks very healthy indeed. 

Paul Summers has no position in Bioventix.

dotDigital

What it does: A digital marketing enterprise helping businesse monetise their audiences and improve customer experience.

By Zaven Boyrazian. When it comes to digital marketing, dotDigital (LSE:DOTD) isn’t short on competition. Yet, as economic conditions have improved, the firm has continuously maintained double-digit revenue and profit growth that seems to have gone ignored by investors.

The small-cap enterprise now generates an average of £1,916 per month from each of its customers, almost double the amount compared to five years ago. And a big part of the rising spending trends is courtesy of management’s investments into its technology, including an AI prediction engine to maximise customer conversion through personalisation.

It’s a powerful tool that few of its competitors provide. And with new marketing channels like WhatsApp being added into the mix, dotDigital is slowly becoming a one-stop-shop for everything that is marketing.

Larger rivals like Hubspot remain a serious threat. However, with larger customers like Mountain Warehouse and British Airways joining the client list, this AIM-listed enterprise seems to be taking the right steps.

Zaven Boyrazian owns shares in dotDigital.

Serabi Gold

What it does: Serabi Gold owns a series of mining projects in Brazil, including the Palito and Coringa complexes.

By Royston Wild. Precious metal stocks like Serabi Gold (LSE:SRB) continue to go from strength to strength. This yellow metal miner is up a stunning 39% in the year to date, propelled by gold prices rising through the $3,000 per ounce marker for the first time.

With this key psychological and technical level taken out, metal values — and with them the prices of Serabi and its peers — could strengthen further.

The African miner’s low valuation certainly leaves room for further gains. Today it trades on a forward price-to-earnings (P/E) ratio of just 3.4 times.

I don’t just believe Serabi Gold is a great stock to consider buying for the current bull run, however. Through a blend of organic growth and acquisitions, the business has plans to turbocharge earnings by lifting production to 200,000 ounces a year over the next few years.

That’s up from the 60,000 ounces planned for 2026. Remember, though, that mining is risky business, and any setbacks at the exploration, production or mine development phases could prove disastrous for profits projections, and with it the share price.

Royston Wild does not own shares in Serabi Gold.

Tristel

What it does: Tristel makes and distributes chlorine dioxide wipes that are used for disinfecting hospital environments.

By Stephen Wright. Shares in Tristel (LSE:TSTL) have fallen almost 30% since the start of the year. I think that’s a lot for a company that still has a lot of potential. 

Tristel is in the process of expanding to start selling its (patented) chlorine dioxide wipes across the Atlantic. But getting into the US has proved challenging.

With a premium product, there’s always a danger of customers being unwilling to move away from established practices. And that’s the risk with the stock.

I think, however, the potential rewards are worth it. Tristel has been following up its ultrasound disinfectant system with a product for ophthalmic devices and this looks promising to me.

If the company can make a breakthrough on this front, I think there could be huge growth ahead. If not, there’s a dividend with a 4.6% yield to fall back on.

Stephen Wright owns shares in Tristel.

YouGov

What it does: YouGov is a market research and data analytics company.

By Alan Oscroft. In a first-half update on 31 March, YouGov (LSE: YOU) said it only “expects modest revenue growth for the rest of the financial year as trading conditions remain challenging reflecting the current macro-economic backdrop.“

The company is still searching for a new permanent CEO after Steve Hatch left by mutual agreement in February. And when interim CEO Stephan Shakespeare talks about a “resilient” performance, and he mentions “considerable change” and “execution challenges,” then we can tell things have been a bit tough.

But the company still says it should meet market expectations for the full year. And it expects operating profit to be balanced more equally between the two halves.

There are clearly risks here, and the share price could remain depressed for some time yet. But analysts expect positive earnings per share (EPS) this year, and then an 80% boost by 2027 that would take the price-to-earnings (P/E) ratio down to only about eight.

Alan Oscroft has no position in YouGov.

The post 5 AIM stocks to consider buying for the long term appeared first on The Motley Fool UK.

Tanking share price

Bioventix (LSE: BVXP) is arguably one example. Shares in the developer and commercial supplier of monoclonal antibodies have tumbled over 40% in the last 12 months. While some of this is likely the result of broader market concerns, a lot is surely down to the company overstating revenues by £327,000 as a result of a customer error. In reality, the firm’s actual revenues came in below market expectations.

This news has clearly shaken confidence and pushed the stock down to a multi-year low.

However, I reckon this could be a great time to think about loading up. As worrying as recent form has been, this is still a company that reeks of quality. Margins and returns on capital remain sky-high, thanks in part to having very few employees. While this has led to the shares trading at a premium to the wider market, the current price-to-earnings (P/E) ratio of 16 is already significantly lower than the firm’s five-year average of 27.

Half-year numbers — due on 24 March — will be worth reading. I reckon it will take only a small chink of light to get the shares moving in the right direction again.

Sales down

Another niche AIM-listed company to consider that’s been battered is laser-guided equipment manufacturer Somero Enterprises (LSE: SOM). Its share price has fallen nearly 20% in 2025 already.

So what’s gone wrong here? Well, investors have become increasingly concerned about the general economic outlook, particularly in the US (where the company’s based) which makes up three-quarters of sales. There’s a chance that things will go from bad to worse if interest rates stay higher for longer and force clients to delay purchasing the company’s cement-levelling tech.

Like Bioventix however, this is another small-cap that scores consistently well on quality metrics. Supported by a strong balance sheet and very experienced management, Somero is also a market leader in what it does. Although never guaranteed, the dividend yield currently stands at a meaty 6.8% too.

Monster dividend yield

A final AIM stock that’s worth pondering is base metals producer Central Asia Metals (LSE: CAML). Like the other two mentioned here, its shares have fallen in recent times, down 14% or so in the last 12 months.

Again, much of this appears to be the result of general geopolitical concerns. That said, demand for lead has been lower. The company drills for this (and zinc) at its mine in North Macedonia. It also has copper operations in Kazakhstan.

On a more positive note, the shares now yield an incredible 10% for FY25. Quite whether investors will see all of this cash is open to debate if costs continue to rise. However, the total dividend is expected to be covered by profit as things stand. The stock looks very cheap too, changing hands at a P/E of just seven for FY25.

Full-year numbers are due tomorrow (20 March). It will be interesting to see how current holders react.

The post 3 top AIM stocks to consider buying before they recover appeared first on The Motley Fool UK.

So with 2024 coming to a close, the question on most investors’ minds is whether this upward trajectory will continue.

Where’s the stock market heading?

As always, when it comes to the short term, there’s a lot of uncertainty surrounding stocks. Here in the UK, the new government Budget is expected to deliver 2% GDP growth next year. And under the incoming Trump administration, economic forecasts for America predict slightly higher 2.5% growth over the same period.

The stock market and the economy aren’t the same entity. But when the latter’s expected to do well, the price of shares rises. That’s because shareholders are forward thinking. And a lot of the momentum seen in 2024 has, in part, been driven by the expectations of a stronger economy next year. Provided this becomes a reality and economic growth’s expected to continue into 2026, the stock market’s likely to continue rising throughout 2025.

At least that’s what analyst projections currently indicate. The FTSE 100’s predicted to reach just shy of 10,000 by the end of next year. And the S&P 500’s on track to hit 6,666, according to Bank of America. Both suggest double-digit returns lie ahead. And while forecasts always need to be taken with a pinch of salt, I remain cautiously optimistic for next year.

Capitalising on returns

Let’s assume analyst projections are accurate and the stock market will grow next year. Which stocks should investors be looking to buy?

Right now, my attention’s turning to local small- and mid-cap companies. After all, domestic enterprises are among the biggest beneficiaries of GDP growth. And with most still reeling from the recent stock market turmoil in 2022, there are plenty of bargains to be had as well.

One stock I’m currently considering is Bioventix (LSE:BVXP). After falling by almost a third throughout 2021, the small biotech group has bounced back, with its latest results showing even more growth potential lying ahead.

As a manufacturer of monoclonal antibodies for blood testing, management isn’t short on demand, albeit sometimes cyclical. The group’s R&D efforts recently revealed a new antibody that can be used to detect Alzheimer’s disease. And it’s now started contributing some modest revenue.

However, with new Alzheimer’s drugs starting to enter the market, the need for a patient monitoring solution like Bioventix’s should surge over the next decade, along with its share price. Of course, this assumes these new antibodies prove to be a commercial success, which is far from guaranteed.

However, as investor confidence rises throughout 2025, the excitement surrounding Bioventix could push its valuation higher in the short term before its valuation becomes backed by fundamentals in the long run.

The post Will the stock market rise in 2025, and how high could it go? appeared first on The Motley Fool UK.

Since I don’t want to keep juggling between different income stocks over the next decade and beyond, I’m hunting for a certain type of dividend stock. Specifically, I’m looking for one that doesn’t just maintain payouts but grows them each year as well. And that’s put Bioventix (LSE:BVXP) in my sights.

Sustainable passive income

For a company to supply continuously rising dividends, it needs two key traits. The first is to have a cash-generative business model. The other is to provide a product or service that will remain in demand for decades. Bioventix seems to have both of these characteristics.

It’s a biotech firm that specialises in manufacturing sheep monoclonal antibodies. In oversimplified terms, these are used in diagnostic medicine to detect heart disease, cancer, infertility, and potentially even Alzheimer’s if the latest ongoing tests prove successful.

Needless to say, detecting diseases isn’t likely to go out of fashion any time soon. And while there are other antibody suppliers around the world, Bioventix’s product portfolio has built a reputation for quality.

It’s undoubtedly a niche product. Yet demand continues to grow, enabling it to consistently boost revenue, earnings and free cash flow generation. So much so that the firm is entirely debt-free and has been consistently hiking its dividend for 10 years in a row.

Right now, the shares are offering a slightly better-than-average dividend yield of 4.1%. But based on analysts’ forecasts, this level of payout is set to continue growing to as high as 5.6% by 2026. And if the trends continue, it may rise even further thereafter.

Everything has its risks

Looking at the numbers, Bioventix’s track record is pretty admirable. And this has also been reflected in its stock price. Since going public in April 2014, the shares of the biotech group have climbed more than 600%!

However, even the best-looking businesses in the world have their weak spots. The difficulty of manufacturing monoclonal antibodies has proven to be quite a powerful barrier to entry against would-be competitors. Yet it’s also proven to be a handicap in terms of increasing production capacity.

At the same time, while diagnostic medicine is in constant demand, the types of antibodies required can be somewhat cyclical. The group’s Troponin antibodies have seen softer-than-expected sales, according to the group’s most recent interim report.

Furthermore, government changes to the headline corporation tax rate are also expected to adversely impact earnings as well as cash flows. This change is obviously out of management’s control. Nevertheless, it adds pressure to the group’s profitability and, in turn, dividends.

Despite these headwinds, I remain cautiously optimistic for this business. Its valuation comes with a small premium that invites some extra volatility. Yet given the long-term relevance of its products and the group’s impressive track record, it’s a premium I’m happy to pay. That’s why I’m planning on adding this business to my income portfolio once I have cash available.

The post 5.6% dividend yield forecast! 1 UK share I’d buy in October and hold for 10+ years appeared first on The Motley Fool UK.

Take Bioventix (LSE:BVXP) as an example. Year-to-date, shares are actually down almost 13%, raising the biotech group’s yield to 4.2% while dragging the price-to-earnings (P/E) ratio down to 23. The latter may not scream bargain. However, considering that this UK stock has historically traded at a much higher premium, it looks like a buying opportunity may have emerged.

Understanding Bioventix

The world of biotech can be quite daunting to explore. After all, modern medical research is a complex field with many businesses chasing similar opportunities. Fortunately, Bioventix is a very niche but incredibly critical business that makes it easier to understand.

The firm’s a manufacturer of monoclonal antibodies used for detecting diseases throughout the human body, such as cancer and heart disease. Labs and hospitals around the world are in need of a constant supply, which Bioventix is more than happy to provide. And over the years, its translated into some impressive financials.

Annual revenue growth’s been a modest yet consistent 8% over the last five years – a trend that’s expected to continue. But the stars of the show are margins, with operating profitability standing at a whopping 79%!

That’s enabled Bioventix to be entirely debt-free despite operating in a capital-intensive industry. It’s also resulted in a cash-rich balance sheet as well as an impressive track record of hiking dividends. In fact, shareholder payouts have been hiked by an average of 21.4% for 10 years in a row so far.

Risk vs reward

It’s clear from the firm’s track record that Bioventix has been a terrific source of passive income over the last decade. And when paired with a 540% increase in share price over the same period, the stock’s also been a stellar investment. But now the question is whether the company can continue this upward trajectory?

From a customer demand perspective, Bioventix doesn’t seem to have any major issues. Manufacturing antibodies is difficult. And while there are alternatives, the group appears to have made itself stand out versus its peers in terms of product quality.

However, this doesn’t automatically make it a guaranteed future success story. The firm’s still exposed to demand cycles from customers. And in its latest interim results, Bioventix is having to tackle some issues on this front. Its Troponin antibodies used to assess heart damage have suffered from softer demand of late, resulting in lower-than-expected revenue generation.

Long-term demand remains promising, but temporary weakness within a small-cap AIM stock can be significant enough to trigger volatility. Nevertheless, with management expanding its portfolio of antibodies for use in new tests for diseases such as Alzheimer’s, the risks may be worth taking. At least, that’s what I think. And it’s why I’m planning to snap up some shares for my passive income portfolio once I have more capital at hand.

The post 1 Cheap UK stock I’d buy to start generating passive income today appeared first on The Motley Fool UK.

By comparison, the average length of a bear market during this time was 1.7 years, with an average loss of 36.5%.

You won’t need us to spell out, then, that long-term investing has proven to be one of the most lucrative methods of growing wealth over the past century!

And small-cap stocks — while riskier investments than their larger peers — have some of the biggest runways to future growth during bull markets.

So without further ado, here are a few candidates that some of our contract writers are bullish on!

Agronomics

What it does: the company invests in early-stage growth firms in the cellular agriculture sector.

By Jon Smith. Agronomics (LSE:ANIC) is a very unique company with regards to being involved in cellular agriculture. Cellular agriculture is the production of agriculture products directly from cell cultures that would have otherwise been derived from traditional agriculture methods.

The portfolio is growing, including shareholdings in firms such as BlueNalu that makes cell-cultured seafood (meaning that no fish are killed in the process). BlueNalu raised $33.5m in funding in October.

It has 22 firms in the portfolio, many of which I expect to do well in the next bull market.

Investing in Agronomics stock allows me to get diversified exposure to this growth market. The main risk here is that the sector as a whole disappoints, or that the companies simply don’t get off the ground. Yet if just one of these businesses hits it big, the Agronomics share price could skyrocket.

Jon Smith does not own shares in Agronomics

Bioventix

What it does: A specialist manufacturer of sheep monoclonal antibodies used for human blood testing worldwide.

By Zaven Boyrazian. Bioventix (LSE:BVXP) is a pretty niche biotech enterprise specialising in sheep monoclonal antibodies (SMAs). Without going too far into the weeds, SMAs are used throughout a wide range of blood tests worldwide. And since demand for such tests hasn’t decreased, the firm is reporting solid growth while many of its peers have seen their financial performance go in the wrong direction.

While the sale of SMAs lies at the heart of the group’s business model, the bulk of revenue actually stems from license royalties from any diagnostic tests that make it to market using the group’s antibodies.

As such, most of the income being generated right now actually comes from contacts secured years ago. And with a new contract supply signed with Seimens, among others, demand looks like it’s ramping up despite cheaper alternatives from competitors. While the threat of rivals can’t be ignored, they appear to be struggling to disrupt Bioventix from its leading position.

Zaven Boyrazian does not own shares in Bioventix or Seimens.

Central Asia Metals

What it does: Central Asia Metals is an AIM-listed producer of copper cathode, lead and zinc.

By Paul Summers. It makes sense that a lot of mining stocks have proved unpopular in 2023. Base metals prices tend to fall when economies are struggling.

Since we can be pretty sure that a bull market will eventually kick in, however, I think this could be a great time to go hunting in the sector. My pick is Central Asia Metals (LSE: CAML). 

While down nearly 40% in value year-to-date, the small-cap’s low-cost operations should mean it can withstand this period of market malaise. Positively, the company announced in October that it was on target to achieve its full-year guidance on production.

Central Asia Metals also boasts a strong balance sheet and a mighty 9.3% forecast dividend yield. 

Analysts are predicting massive supply deficits in the years ahead. With the shares trading at just seven times earnings, I reckon this could be an excellent contrarian buy. 

Paul Summers has no position in Central Asia Metals

IG Design

What it does: the company designs and makes celebration, stationary, creative play, gifting and not-for-resale consumable products. 

By Kevin Godbold. IG Design’s (LSE:IGR) business is sensitive to general economic shocks and earnings collapsed along with the share price in the trading years to March 2022 and 2023. But economic times could be on the mend for consumers. And City analysts predict a massive earnings rebound ahead. 

Estimates I’ve seen anticipate a return to pre-Covid profits as early as the next trading year to March 2025. Meanwhile, the share price languishes around 148p as I write compared to a peak above 760p pre-pandemic. 

Meanwhile, the valuation looks undemanding with a forward-looking earnings multiple of just under five when set against expectations. And in October, the company issued an encouraging trading statement.  

This is a racy choice with plenty of cyclical risk. Earnings could easily decline again if economic conditions remain tough. Nevertheless, the stock has the potential to soar in the next bull market if profits gain traction in the months ahead. 

Kevin Godbold does not own shares in IG Design. 

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. After several high-profile energy suppliers have gone bust in recent years, it might seem strange why I think this one is set to rocket in the next bull market.  

But there’s a key difference. Rather than supplying households, Yü Group (LSE:YU.) focuses on businesses. Its Digital by Default strategy offers them a quick and easy way to sign up and monitor their usage and bills.  

Most SMEs have tended to stick with one of the “Big Six” suppliers. But with soaring energy costs in recent years there is an opportunity for Yü to take market share. 

The tech-focused strategy has already started to reap rewards. Sales and profits in the first half of 2023 jumped by 51% and 62% respectively. But I reckon there’s more growth to come.  

Bear in mind that Yü isn’t risk-free. It relies on being able to hedge its energy exposure using a wholesale energy market counterparty. Any breach or removal of this agreement could have a material impact. 

Harshil Patel does not own shares in Yü Group. 

The post 5 small-cap stocks Fools think will soar in the next bull market appeared first on The Motley Fool UK.

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

Bioventix

What it does: Bioventix develops and supplies high-affinity monoclonal antibodies for use in clinical diagnostics

By Paul Summers: AIM isn’t known for being overburdened with quality companies. However, one clear example is Bioventix (LSE: BVXP). 

This biotech firm consistently generates astonishing margins. In fact, Bioventix is arguably one of the best companies in the UK based on this metric.

Recent trading has been reassuringly solid too. Pre-tax profit jumped 27% to £4.5m in its last set of interim results.

Throw in a rock-solid balance sheet and an enviable position in its niche market and there’s a lot to like.

Unfortunately, the shares currently change hands for almost 26 times forecast earnings. That’s fairly rich even when investor sentiment is high, let alone during a period of economic strife.

This could prove problematic if, for whatever reason, the firm issues a less-than-encouraging update.

Then again, you tend to get what you pay for. I doubt Bioventix stock will ever be available for a bargain-basement price.

Paul Summers has no position in Bioventix.

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. There are three main reasons I’ve selected Cerillion (LSE: CER) as my top AIM stock this month.

The first is that the company has a lot of momentum right now. For the six-month period to the end of March, it posted revenue of £20.5m, up 27% year on year, and adjusted earnings per share of 25.5p, up 37%.

The second is that the company just raised its interim dividend by a whopping 27% to 3.3p per share. This suggests to me that management is very confident about the future.

The third reason is that it has positive share price momentum. This is a stock that is in a very strong uptrend right now. I’d much rather buy a stock that is trending up than one that’s trending down.

Now, it’s worth noting that Cerillion does have a high valuation. Currently, the forward-looking P/E ratio here is in the low 30s. I’m comfortable with the valuation given the strong growth here. However, it does add some risk.

Edward Sheldon owns shares in Cerillion.

Creo Medical  

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

By Ben McPoland. Creo Medical (LSE: CREO) is an intriguing AIM stock. Its flagship Speedboat Inject product is a multimodal instrument designed for flexible endoscopy. Instead of being just a long, camera-mounted tube looking inside a patient’s body, this product is more like a high-tech Swiss army knife. It can dissect, cut out, inject and coagulate all in a single device.

This makes procedures far less invasive, potentially turning hospital stays into routine one-day visits. Indeed, Creo estimates that its Speedboat device saves the NHS £5,000 per procedure. More clinicians around the globe are now being trained on its suite of electrosurgical products.

Furthermore, its instruments are powered by an advanced – and patented – energy system. And it is already licensing its technology out to other firms, including robotics giant Intuitive Surgical. 

The company recently raised over £33m to fund its growth, and management expects this will be sufficient to reach positive cash flow by 2025.

Though there’s a risk that doesn’t happen, I’m backing Creo to become a much larger company.

Ben McPoland owns shares in Creo Medical and Intuitive Surgical.

Michelmersh Brick Holdings

What it does: Michelmersh is a premium brick manufacturer that owns brands including Blockleys, Carlton and Hathern Terra Cotta.

By Roland Head. My top AIM stock right now is Michelmersh Brick Holdings (LSE: MBH). Shares in this specialist firm have fallen by a third from their 2021 highs. I think they look excellent value on a medium-term view.

The main risk facing the business is that the housing slump will be more severe than expected, perhaps alongside a UK recession. A wider construction downturn could also be problematic.

Michelmersh’s valuation could become more depressed in this scenario. But I think the company’s portfolio of distinctive brands and £10m net cash balance mean that it will ride out any short-term headwinds and return to profitable growth.

I’m also reassured by the combined 28% shareholding of co-founders Eric Gadsden and Martin Warner, who remains chairman.

The stock currently trades on around nine time forecast earnings with a 4% dividend yield. If I didn’t already own shares in a housebuilder, I’d be buying at this level.

Roland Head does not own shares in Michelmersh Brick Holdings.

The post Best AIM stocks to buy in July appeared first on The Motley Fool UK.

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

Anglo Asian Mining 

What it does: Anglo Asian Mining is an AIM-listed mining share whose precious and base metals projects span the globe. 

By Royston Wild. Commodities are popular wealth preservers with investors during uncertain times. And by extension so are producers of raw materials like metals. This is why I believe Anglo Asian Mining (LSE:AAZ) could be a top investment for April. 

This UK mining share produces gold, silver and copper from its assets in Azerbaijan. It also owns a stake in Libero Copper & Gold Corporation, a business with precious and industrial metal assets in The Americas. 

The prices of Anglo Asian’s metals could continue climbing if worries about high inflation and a banking sector crisis persist. They could also keep rising if factory data from commodities glutton China impresses. Manufacturing PMI readings from the country soared to their highest in more than a decade recently. 

I think this small-cap stock is especially attractive for income investors. It carries a meaty 5.9% dividend yield at current prices.

Royston Wild does not own shares in Anglo Asian Mining. 

Atlantic Lithium

What it does: Atlantic Lithium is an Australia-based lithium exploration company, operating in West Africa.

By Alan Oscroft. Lithium for batteries is in great demand from the electric vehicle industry. But demand for shares in lithium explorers has gone off the boil.

Atlantic Lithium (LSE:ALL) has always been hard to value, as it’s not making any profit yet. But nearly all of the share price gains of 2021 and 2022 have now been reversed.

I suspect that’s more likely to be due to a turn away from growth stocks than anything else.

Forecasts suggest relatively small losses for this year and next. But there’s a profit down for 2025, putting the shares on a price-to-earnings (P/E) ratio of under six.

The company had cash of AU$19.1m at 31 December. So how long that will last and what new cash might be needed before profitability is reached looks like the big risk.

But I think I’m seeing a buying opportunity in this small-cap stock.

Alan Oscroft does not own Atlantic Lithium shares.

Bioventix

What it does: Bioventix is a UK biotech firm developing and supplying high-affinity diagnostic antibodies for the medical industry.

By Zaven Boyrazian. Bioventix (LSE:BVXP) is a biotech firm specialising in sheep monoclonal antibodies. These antibodies serve a pivotal role in human medical diagnostics, and are most commonly used on blood testing machines in hospitals and research labs.

Despite being a critical supplier to the healthcare sector, the firm took quite a stumble during the pandemic. With the industry primarily focused on tackling Covid-19, blood diagnostic antibodies weren’t exactly in high demand.

With Covid-19 no longer dominating hospitals, demand for Bioventix’s niche products is back on the rise. And thanks to its antibodies specialising in detecting vitamin D deficiency, pre-tax profits have returned to double-digit growth.

Bioventix looks like it’s back on track. And while trading at a P/E ratio of 25 is certainly not cheap, it may be a justifiable price given the small-cap stock’s long-term potential.

Zaven Boyrazian does not own shares in Bioventix Plc.

Calnex Solutions

What it does: Calnex Solutions is a Scottish company that specialises in testing and measurement services for telecommunication networks.

By Edward Sheldon, CFA. Calnex Solutions’ (LSE: CLX) share price took a big hit recently after the company warned that performance in FY2024 was likely to be below that of FY2023. It noted that in the current macro environment, some customers are taking a more cautious approach to investment decisions.

However, the company also said that it is confident that, as the industry spending cycle normalises, it will see an uplift in orders from the current, more subdued, levels. And looking further out, it said that it remains well placed to capitalise on the underlying long-term growth drivers in the telecoms and cloud computing markets. “We are well-placed to return to a growth trajectory once market confidence returns,” said founder and CEO Tommy Cook.

Given management’s confidence in the long-term growth story, I’m looking at the recent share price weakness here as a buying opportunity. I think it’s only a matter of time until growth picks up and the share price moves higher.

Edward Sheldon owns shares in Calnex Solutions.

Everyman Media Group  

What it does: Everyman Media Group is the owner of the premium cinema chain.  

By Charlie Keough. Everyman Media Group (LSE: EMAN) shares have failed to excite this year, down 15% as I write. Yet despite this, I think the future looks bright for the small-cap stock.  

2022 saw revenues increase by a whopping 62.5% compared to 2021. And while this might be expected given the impact of the pandemic, the 20% jump its latest revenues represents from the pre-pandemic year highlights Everyman’s strong growth.  

Last year also saw the business beat expectations with EBITDA coming in at around £14.5m. On top of this, it managed to maintain its market share with its 38 venues.  

Looking to this year, Everyman is set to open venues in five new locations, including the likes of Durham and Plymouth.  

Consumers tightening their belts may impact the business in the short term. But with a strong pipeline of releases lined up for 2023 alongside the unique service Everyman provides, the stock could present a solid opportunity in April.  

Charlie Keough does not own shares in Everyman Media Group.  

Everyman Media

What it does: Everyman is a premium and luxury chain of cinemas located across the UK.

By John Choong: With the cost-of-living crisis continuing to bite down on consumer spending, many would expect discretionary spending to take a hit. However, Everyman (LSE:EMAN) has bucked the trend with its premium experiences. Cinema goers don’t normally pay more than £10 per ticket, but at Everyman, customers pay upwards of £20 for luxurious and comfortable seats with at-seat service.

This proposition sets this small-cap stock apart from its competitors, as its products are catered towards more affluent spenders. As such, sales have managed to stay robust through difficult times. In fact, they’re expected to continue growing in the medium term as the UK’s fourth-largest cinema chain is anticipated to open another four venues this year. 

Combine the above with resilient retail sales data so far this year and reasonable multiples, and it’s not difficult to see why I’m keen on adding Everyman shares to my portfolio.

John Choong has no position in any of the shares mentioned.

Income & Growth VCT

What it does: Income and Growth is a venture capital trust that owns stakes in a variety of small and medium businesses.

By Christopher Ruane. A weak economy and rising interest rates could make this a challenging time for young businesses.

Some will still do well, though – and spotting them could be lucrative. That is what the fund managers at venture capital trust Income & Growth (LSE: IGV) aim to do. A recent successful example is the trust’s investment in software provider Tharstern. An investment of £1.5m has generated cash proceeds of £4m in under nine years.

Not all picks will be as successful. A difficult economy risks worsening investment results.

But the small-cap stock has a strong track record, and successful investments could help fund future dividends. The current yield is 10.7%. Dividends have moved around from year to year but have often been substantial.

I like the strong income potential and would be happy to buy the shares for my portfolio in April if I had spare cash to invest.

Christopher Ruane does not own shares in Income & Growth VCT.

Pensana 

What it does: Pensana is a rare earth metals company aiming to break China’s monopoly on the processing of the critical minerals. 

By Mark Tovey. Rare earths include a list of 17 chemical elements with strange names but familiar applications. Neodymium, for example, is used in the magnets that make smartphones vibrate. Promethium is needed in pacemakers.  

China is responsible for processing 85% of the world’s supply of rare earths. Outside of China, there are only two rare earth processing plants. That number will soon rise to three, thanks to Pensana’s (LSE:PRE) planned separation facilities in the Humber Freeport.  

For the project, Pensana received an undisclosed sum from the UK government. Western leaders are anxious to free the rare earths supply from China’s stranglehold.  

I plan to buy shares in Pensana, although it will only be a very small proportion of my portfolio. That’s because Pensana has no revenues, putting it at the mercy of capital markets. In addition, its neodymium-praseodymium mine in Angola could be struck by any number of geological or political catastrophes.  

Mark Tovey does not own shares in Pensana. 

Somero Enterprises

What it does: Somero Enterprises designs, assembles, remanufactures, sells, and distributes concrete leveling, contouring, and placing equipment.

By Paul Summers: Shares in laser-guided equipment maker Somero Enterprises (LSE: SOM) have sunk by 25% or so in the last year as the market has fretted over rising interest rates. The concern is that this will cause a recession in construction. Since Somero’s tech helps to lay perfectly flat floors, that makes sense.

As an existing shareholder, however, I’m not worried. In fact, I’m contemplating increasing my position in this high-quality, cash-rich company.

March’s full-year results read just fine to me. Revenue remained steady and profit dipped only slightly due to higher costs. 

This makes the valuation of a little over eight times earnings look like a steal. There’s even a monster 7% forecast dividend yield in the offing while I wait for the share price to recover. 

Although pure speculation on my part, I also wonder if we could see a few takeover bids in the near future.

Paul Summers owns shares in Somero Enterprises

The post Best British small-cap stocks to buy in April appeared first on The Motley Fool UK.

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

Premier Miton

What it does: Premier Miton is a UK fund manager that provides a wide range of actively managed funds and investment trusts.

By Roland Head. Premier Miton (LSE: PMI) has had a tough year, but I think it could be the right time for me to buy shares in this well-respected firm.

It’s normal to see fund managers’ profits fall when markets slump. This is because their fee income is based on the value of assets under management.

However, while Premier’s share price has fallen by nearly 50% in 2022, pre-tax profit for the year to 30 September only fell by 15%. That’s left the stock looking cheap to me, trading on 13 times forecast earnings, with a dividend yield of 8.5%.

There’s obviously a risk that the dividend could be cut if market conditions worsen next year. However, I think it’s more likely that conditions will stabilise and the payout will be held.

In my view, this is a good opportunity to buy into this cyclical business. I think the shares could do well from current levels.

Roland Head does not own shares in Premier Miton.

Bioventix 

What it does: Bioventix produces monoclonal antibodies to sell to customers for use in commercial and research applications.  

By James J. McCombie: Bioventix (LSE: BVXP) is a £192m biotech stock that trades on the Alternative Investment Market (AIM). This small-cap biotech stock has growing sales and turns a profit. In fact, it’s been profitable for years and its bottom-line number is increasing. It generates plenty of free cash flow and pays a steadily increasing dividend. 

The stock is a little expensive compared to its industry and the wider market, trading at a P/E ratio of 23. However, for a company with increasing sales, a massive 79% operating margin, and consistent earnings power, I think it’s a price worth paying for the quality of the business. 

But new product development is a long and relatively expensive process to get all the way to approval. There is always a chance, as with all biotech and research-heavy companies, that what Bioventix risks today will not be rewarded in the future. 

James J. McCombie does not own shares in Bioventix 

On the Beach

What it does: On the Beach Group is a Manchester-based online retailer of beach holidays.

By Paul Summers. As a shareholder of On the Beach (LSE: OTB), I can’t say that 2022 has been all sunshine and fun. Notwithstanding this, I’m beginning to think the worst might be over.

Recent trading has been encouraging. Revenue for FY22 jumped 373% on the previous year and is back to pre-Covid levels. If this continues, I expect profit to seriously recover in 2023, especially as this small-cap already has a 20% share of its niche market.

That said, nothing can be guaranteed. Clearly, the consumer slowdown could delay a sustained rise in earnings and, ultimately, the share price.

I think the valuation of 12 times earnings takes account of this. Moreover, On the Beach’s finances look stable, helped by the fact that its online-only model means it can cut marketing spend quickly and painlessly if needed.

I’m considering topping up my position in this small-cap stock.

Paul Summers owns shares in On the Beach.

Mulberry

What it does: Mulberry is a British fashion company best known for its luxury leather goods, particularly women’s handbags.

By John Choong. Luxury stocks tend to hold up rather well during a recession. This is because of the Veblen effect, which is a phenomenon where consumers perceive higher prices to constitute higher value. As such, I’m expecting Mulberry (LSE: MUL) to benefit from this.

Its share price may be down over 20% this year, but recent developments surrounding its key market, China could spell strength for the luxury brand. After all, analysts at Shore Capital noted that Mulberry is “well positioned to deliver on the Asian-focused geographical expansion and potential product extension strategy”.

Currently trading at a lucrative PEG ratio of 0.1, the luxury stock screams a bargain. This is especially the case when I consider the stock’s upside potential. As the world’s most affluent consumers wait to spend big in the coming months, it’s not difficult to see why Barclays has a price target for the stock at £3.40. This presents me with a 36% potential upside if I were to buy its shares today, and is something I’m deeply considering.

John Choong has no position in any of the shares mentioned.

Argentex

What it does: Argentex is a financial services company that provides foreign exchange (FX) services to institutions, corporates, and private individuals.

By Edward Sheldon, CFA. Argentex (LSE: AGFX) appears to have a lot of momentum right now.

In November, the company posted strong results for the six months to 30 September, with revenue coming in at £27.4m, up 75% year on year, and adjusted operating profit amounting to £7.3m, up 55% year on year.

Then, in December, the company told investors it expected revenue and earnings for 2022 to be ahead of market expectations.

I don’t think this strong momentum is factored into the share price, however. Currently, the stock has a relatively low valuation.

Going forward, revenue growth could moderate. In recent months, FX volatility has been elevated and the company will have benefitted from this.

I think the company has the potential to keep growing at a healthy rate though. And at the current valuation, I see a lot of appeal in the small-cap stock.

Edward Sheldon has no position in Argentex.

Gateley Holdings 

What it does: Gateley Holdings is an AIM-listed commercial law firm with 15 offices in Britain and one in Dubai. 

By Royston Wild. I think Gateley Holdings (LSE:GTLY) could be a top value stock for me to buy in January. The company is tipped to enjoy an 8% rise in annual earnings this fiscal year (which ends in April 2023). This leaves it trading on a forward price-to-earnings (P/E) ratio of 11 times. 

On top of this, the company offers up a tasty 5.5% dividend yield. 

Gateley provides a range of legal and professional services in sectors such as banking and financial services, property, and pensions and benefits. And right now the business (which has a market cap of £220m) is trading extremely strongly. 

Latest financials in November showed revenues up 22% in the six months to October and an 11% rise in underlying adjusted pre-tax profit.  

I’m expecting Gateley to announce that trading has remained robust when it next updates the market on Wednesday, 18 January. This could lead to fresh share price gains. 

Royston Wild does not own shares in Gateley Holdings. 

Anpario

What it does: Anpario designs and manufactures specialised animal feed additives to improve livestock healthcare.

By Zaven Boyrazian. Despite the rising popularity of plant-based foods, meat and fish protein consumption continues to surge. And that’s driven quite a bit of demand for small-cap stock Anpario (LSE:ANP).

The business is a manufacturer of specialised animal feed healthcare additives. Farmers blend Anpario’s products into their livestock’s food to achieve superior health, toxin management, hygiene, and insect control. The result is a better quality of life for the animals, reduced medical expenses for farmers, and higher quality protein for consumers.

The business has recently completed an expansion of its UK factory, drastically improving its production capacity. The timing is impeccable, given recent regulatory changes in China have banned a significant chunk of its competitors’ products, creating a window of opportunity.

The firm’s reliance on a single factory does introduce some risk. After all, any prolonged disruption at the facility could result in customer orders being fulfilled by rivals. But given the importance of its industry, this risk seems worthy of the potential long-term rewards.

Zaven Boyrazian does not own shares in Anpario.

The post Best British small-cap stocks to buy for January appeared first on The Motley Fool UK.