Strix

As I type, shares in kettle safety device manufacturer Strix (LSE: KETL) are up 70% over the last year. That’s a superb return for what is, admittedly, not the most exciting of businesses. In fact, KETL has been a winning AIM stock since coming to the market. In four years, the shares are up 173%.

This momentum might just continue. In July, the company said it was now expecting to deliver revenue growth of 50% or so for the first half of 2021, and roughly 30% for the year as a whole. Any improvement to the latter when interim numbers are confirmed in September should do the share price no harm.

I’m not the only one bullish on Strix either. Earlier this month, analysts at Liberum said the company was primed for a re-rating, due to the potential earnings growth on offer. 

Of course, there’s a chance the shares could lose steam at some point. Early holders may want to bank some profit, for example. Even so, a valuation of 24 times forecast earnings still doesn’t feel unreasonable. The solid dividend stream compensates me for choppier times too.

Inspecs

Eyewear manufacturer and distributor Inspecs (LSE: SPEC) is another AIM stock I’d buy now. Its shares are up 51% in value over the last year. In its 18 months as a listed company, SPEC has returned 86%.

All this is rather impressive considering Inspecs came to market at the worst possible time. Due to Covid, group revenue fell almost 25% to $47.4m in 2020. The firm also reported a post-tax loss of $8.9m. 

Still, next month’s interim figures should be more encouraging. Inspecs has certainly been preparing itself for better times by snapping up lens maker Norville and manufacturer Eschenback. It’s also been adding new global brand licences to its portfolio. 

Yes, a P/E of 30 is getting punchy and shares are less liquid than those of other companies (meaning price moves could be more pronounced). However, I think the ‘essential’ nature of its products makes up for this risk.

Mortgage Advice Bureau

A final AIM stock worth buying in advance of September is Mortgage Advice Bureau (LSE: MAB1). As one might expect, trading has been excellent of late, thanks to a booming UK housing market. However, shares now trade on 39 times earnings, having climbed 123% in value in 12 months. Is this too high?

It’s certainly not cheap. Then again, recent demand for housing (and, by association, MAB’s services) surely won’t grind to a halt. More people are wanting to work from home, after all. Moreover, I’d be shocked if next month’s interim results were anything but great. 

As a (mostly) buy-and-hold investor, I also think it’s important not to base an investment decision purely on a single metric. Expensive stocks can continue going up if they can carry on growing. As an aside, returns on capital are high and the firm has net cash on its balance sheet — just the sort of things I look for.

MAB’s still a buy for me.

The post 3 AIM stocks to buy before September appeared first on The Motley Fool UK.

With that in mind, here are two high-growth stocks I’d buy for my portfolio today. 

High-growth stocks to buy 

The first company on my list is Cairn Homes (LSE: CRN). This Irish-based home builder has reported impressive growth over the past five years. Total revenues have increased from just €4m in 2015 to €435m for 2019. 

Revenues dropped in 2020, but they are expected to return to growth in 2021. Analysts reckon the company could print revenues of €529m in 2022, a multi-year high. 

At the same time, group profits could surge to €59m, outpacing 2019’s high. While these are just forecasts and, as a result, subject to change, I think they show the company’s potential. 

However, despite its growth outlook, the stock is currently changing hands at a 2022 price-to-earnings (P/E) multiple of just 12.9. I think that is far too cheap. 

Of course, these projections are all based on forecast numbers, so there’s no guarantee the company will meet these projections. If it doesn’t, the current valuation might look expensive, especially if earnings fall. That’s probably the most considerable risk hanging over the stock right now. 

Despite this, I would still buy the company for my portfolio of high-growth stocks considering its potential. 

Growth market 

Designer, manufacturer, and distributor of eyewear frames Inspecs (LSE: SPEC) is, in my opinion, a desirable growth investment. According to reports, the number of people requiring glasses is increasing as we spend an ever-growing amount of time stuck in front of screens. 

I think this suggests companies like Inspecs could be set for an extended period of growth as spending in the eyecare market expands. 

The company’s revenue fell last year as the pandemic ravaged businesses around the world.

However, management used the opportunity to increase the company’s diversification and vertical integration. It acquired two other firms, Norville and Eschenbach. The enlarged group is now a “well-balanced vertically integrated business serving both global retail chains and the independent optical market.“

Revenue is already picking up. The group reported sales of $67m in the first quarter of 2021, compared to $47.4m in the fourth quarter of 2020. 

Based on this expansion, City analysts are already expecting a record year for the group. They’ve pencilled in a record net profit of $11.2m for the year. 

Based on these projections, I would buy the company for my portfolio of growth stocks.

Key risks and challenges the company might face include making a poor acquisition, which could lump the business with unwanted debt and eat into profit margins. Competition in the sector could also hurt profit margins and sales growth.

Indeed, this is only a relatively small business compared to its multi-billion dollar peers. All of these have bigger marketing budgets and more substantial balance sheets. 

The post 2 high-growth stocks I’d buy today appeared first on The Motley Fool UK.

Inspecs

Since covering the company in September, eyewear frames designer, manufacturer and distributor Inspecs (LSE: SPEC) has performed well. Its share price has climbed 45%. Over the last year, it’s up 59%.

That may seem strange considering today’s full-year numbers. Revenue fell 22.5% to $47.4m in 2020. A pre-tax loss of $8.9m was also revealed.

Of course, the usual suspect — Covid-19 — was to blame. Early on in the pandemic, Inspecs’s production site in China was impacted. Lockdowns globally then forced clients to shut stores and distribution depots closed. This was never going to be an easy ride for the £350m cap. 

On a more positive note, Inspecs revealed today that trading had significantly improved in the second half of last year. This, coupled with the emergence of effective vaccines, goes some way to explaining why the share price has remained resilient.

Whether the valuation continues increasing over the rest of 2021 is hard to say. Like most businesses, Inspecs’ near-term outlook will depend on whether we really are coming to the end of the pandemic. Although trading has recovered, it would be brave (or foolish) to assume no risk remains.

Even so, I remain bullish from a longer-term perspective. As part of its growth strategy, 2020 saw Inspecs acquiring other businesses, increasing its manufacturing capacity and adding more brands to its portfolio. A new facility in Vietnam is now up and running and the AIM-listed company’s order books are “higher than at the same time in 2020 on a like for like basis”.

Taking all this into account, I’d still be happy to buy this growth stock at its current price.

CVS Group

Since I wrote about it at the same time, it makes sense to return to look at how shares in veterinary services firm CVS Group (LSE: CVSG) have performed too.

Thanks to the huge growth in pet ownership seen over the multiple UK lockdowns, it’s no surprise to see that the shares have pretty much doubled in value. In the last year, the price is up 131%!

Encouragingly, the company reported in April that the trading momentum seen earlier in 2021 had continued. Sales remained “strong“, helped by the Royal College of Veterinary Surgeons’ decision to permit non-essential services.

As a result, CVS now expects revenue for FY21 to be better than previous expectations. Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) will also be “comfortably ahead“.  This is exactly what investors want to hear from companies they own.

So, is it time to take profit? I’m not so sure. Since spending on pets is non-discretionary (owners consider them members of the family), I actually think there’s more upside ahead. This is exactly why top UK fund managers such as Terry Smith love this part of the market. 

CVS Group has had a great run, reflected in its rich valuation of 31 times forecast earnings. However, I’d be far more comfortable buying a slice of this company today over a similarly priced but cyclical growth stock. 

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Momentum share for a stock market rally

Harry Potter publisher Bloomsbury (LSE: BMY) enjoyed a magical 2020 thanks to more of us picking up a book or 10 during lockdowns. Back in October, the firm revealed a 10% rise in revenue (to £78.3m) and 131% jump in pre-tax profit (to £3m) over the six months to the end of August. Since we’re now into our third national lockdown, I can see this performance lasting a while longer.

Bloomsbury’s financial year ends next month. However, it probably won’t be until May that the company reveals how it’s performed over the last few months. That said, this does allow me time to take a position before the news is announced. 

Of course, whether the company can sustain recent momentum once the stock market rally has run its course isn’t a given. But I’m encouraged by it having plenty of cash on its balance sheet and reinstating dividends.

Rocketing revenue

With its share price soaring in recent months, my decision to buy a stake in laser-guided equipment manufacturer Somero Enterprises (LSE: SOM) in 2020 was one of my better calls.

Somero expects to post revenue of roughly $88m for the full year thanks to excellent trading in North America. This is far more than the $80m analysts were predicting. Adjusted earnings (EBITDA) of about $26m will also be “significantly ahead” of the $21m previously expected.

I can see Somero carrying this form into 2021, even if further planned investment in staff will temporarily impact profits. Demand for its products in the US looks likely to be sustained based on feedback the company has received. A revival of business in Europe and other markets once Covid-19 is conquered is also possible.

Factor-in a special dividend from cash-rich Somero and a forecast P/E of 14 for FY21 and it looks attractive to me in a stock market rally.

Looking good

Bath-based eyewear maker Inspecs (LSE: SPEC) is another small-cap stock showing positive momentum.

It wasn’t always this way. The shares fell 25% not long after their debut on the market last February. After recovering over the summer, they fell again in September and October, highlighting the volatility of small-cap shares that investors need to be aware of.

More recently, the performance has been much better. The shares have almost doubled in value since November. That’s quite a result considering we’ve heard very little from Inspecs over this period. No matter. I think the best stocks for me to own are often the ones not making headlines.

On 28 times forecast FY21 earnings, Inspecs looks expensive. But I think the PEG (price-to-earnings ratio/earnings growth) ratio of 1.6 is worth paying attention to. This implies the shares may actually be trading at a fair-rather-than-excessive valuation given the company’s potential. Add in its global reach and non-cyclical market (those who need glasses get glasses) and I think the £350m cap becomes an increasingly enticing investment proposition.

The post With £3,000 to invest in the stock market rally, I think these UK small-cap shares will keep rising in 2021 appeared first on The Motley Fool UK.

Tom Rodgers: Sylvania Platinum

Sylvania Platinum (LSE: SLP) is one of those stocks I think will become increasingly strategically important. The platinum group metals the company processes at a low cost from its base in South Africa are used in practically every modern electrical appliance. Prices for rhodium and palladium have rocketed to near all time highs this year as demand outstrips supply.

With $55m cash and no debt, profits and earnings per share both doubling from 2019 to 2020, and investors in line for a special windfall dividend in 2021, this is one of the most obvious micro-cap no-brainers I’ve seen for years. 

Tom Rodgers owns shares in Sylvania Platinum.

Zaven Boyrazian: Tristel

Throughout 2020, medical centres around the world have adopted far more rigorous cleaning standards. In light of recent news, a Covid-19 vaccine may soon be ready.

However, even after this pandemic comes to an end, the increased disinfecting practises are likely to continue with stricter legislation. This creates a vast opportunity for Tristel (LSE:TSTL).

The firm manufactures infection prevention products that are widely used throughout hospitals. Given each of their products are consumables, they create a recurring income from existing customers.

As all products require FDA approval, Tristel faces little competition within a rapidly expanding market space.

Zaven Boyrazian does not own shares in Tristel.

Kirsteen Mackay: Tracsis

Tracsis (LSE:TRCS) is a UK tech stock that makes software specifically designed for the transportation industry, with railways being a main beneficiary. The company has been publicly listed for 13 years and its share price has risen approximately 1,075% during this time.

With the pandemic pausing travel, this has caused a sharp shock to the company, but it’s still winning government contracts. Although the Tracsis share price has seen extreme volatility this year, I think it will renew its growth trajectory once normality resumes. It has a £150m market cap. Its price-to-earnings ratio is 28 and earnings per share are 17p. 

Kirsteen does not own shares in Tracsis.

Edward Sheldon: Cerillion

My top micro-cap stock for November is Cerillion (LSE:CER). It’s a leading provider of cloud-based (SaaS) billing, charging, and customer management systems.

Cerillion appears to have plenty of momentum at the moment. In October, the group advised that trading in the second half of the year ended 30 September was strong. During this period, the company signed its largest-ever contract. Meanwhile, it said that its back-order book was at record highs and that it expects revenue and adjusted EBITDA for the year to be ahead of current market expectations.

At the time of writing, Cerillion has a market cap of under £100m, meaning there’s plenty of potential for growth. All things considered, I think this micro-cap stock looks pretty exciting.

Edward Sheldon has no position in Cerillion.

Rupert Hargreaves: Inspecs

I have my eye on UK-based designer, manufacturer and distributor of eyewear frames, Inspecs (LSE: SPEC).

The UK eyewear market is vast, and it’s only expected to continue to expand over the next few decades. This growth is projected to show through in Inspecs’ top line next year. Sales set to jump by a third in the next two years.

A cash-rich balance sheet could also hint at the prospect of large dividends from this consumer-focused business.

In my opinion, as Inspecs’ sales expand over the next few years, the stock has the potential to jump higher.

Rupert Hargreaves does not own shares in Inspecs.

Royston Wild: Bloomsbury Publishing

Bloomsbury Publishing is a share I’d buy today and hold for all time. It’s not just the eternal appeal of the Harry Potter franchise which makes this UK share a great long-term buy. I’m also encouraged by the huge profits potential of its move into academic publishing.

Bloomsbury’s shares recently soared to their most expensive since February on some blowout trading numbers. First-half earnings clocked in at twelve-year highs as sales of the publisher’s online books and e-books rocketed. The performance of its digital academic products was also impressive as institutions switched to remote learning due to the pandemic. As a consequence sales of these particular products surged by almost half year on year.

With organic sales rocketing, and its cash-packed balance sheet also creating chances for more profits-boosting acquisitions, I reckon Bloomsbury is a terrific buy right now.

Royston Wild does not own shares in Bloomsbury Publishing.

Kevin Godbold: MPAC

Global packaging company MPAC (LSE: MPA) aims to become a market leader in the “pharmaceutical, healthcare, food and beverage sectors.”

I think MPAC’s niche in those defensive sectors looks attractive. The business is bouncing back from the first wave of Covid-19 lockdowns. And in September the directors announced an acquisition in the US, followed in October by the relaunch of the MPAC brand along with a new corporate website.

City analysts expect earnings to resurge more than 50% in 2021. And with the stock near 400p, the forward-looking earnings multiple is just below 11. With growth on the agenda, I’d buy the micro-cap stock for November and beyond.

Kevin Godbold does not own shares in MPAC.

Jonathan Smith: Oxford Metrics

Oxford Metrics (LSE: OMG) is a UK based software and data analytics company, with offices worldwide. It has an asset management software arm called Yotta, that has been performing very well in recent times. I feel the business is well set to perform well even during an extended pandemic situation. The firm has no debt, and cash balances of over £14m as of Q2 2020. 

The nature of the business also means strong ‘annualised recurring revenue’, that was up 14.6% versus last year. This should aid continued growth in the future. The share price has doubled in value over the past 5 years.

Jonathan Smith does not own shares in Oxford Metrics.

Roland Head: Brickability

Recent results suggest the housebuilding market is enjoying a rapid recovery from the COVID-19 slump. One company I think could benefit from this strong demand is Brickability (LSE: BRCK).

This £115m firm sells bricks, roofing, and other building materials to housebuilders. Growth areas include heating, plumbing and doors. Chairman John Richards says that the company is seeing a “V shaped” recovery and the firm has just issued a solid set of half-year results.

The shares trade on just seven times 2021 forecast earnings and offer a well-covered 5% yield. I’d be happy to buy at these levels.

Roland Head does not own shares in Brickability.

Paul Summers: Churchill China

With things looking positive on the coronavirus vaccine front, my pick of the micro-cap stocks this month is ceramic tableware supplier Churchill China (LSE: CHH). 

Naturally, the £140m cap has seen its revenue, profits, and share price walloped by the virtual shutdown of the hospitality sector in 2020. However, I think the potential rewards now outweigh the risks.

While a full recovery won’t be immediate, earnings are expected to bounce back in 2021 as pubs, restaurants and hotels reopen. In the meantime, this high-quality, ‘family-owned’ company has cut costs where it can and remains debt-free.

Paul Summers owns shares in Churchill China.

Matthew Dumigan: Tatton Asset Management

Since flotation in 2017, shares in Tatton Asset Management (LSE: TAT) have been rather volatile. However, over the three years, the company’s share price has risen 45%, delivering a tidy return to investors. 

The company provides a range of on-platform only services ranging from discretionary fund management and compliance to mortgage provision. What’s more, the firm’s recent half-year results report was positive, with group revenue increasing by 12.6% year-on-year and adjusted operating profit rising by 21.9%.  

Ultimately, I’m impressed by the company’s earnings growth and I reckon Tatton can continue to deliver a strong performance in the years to come.  

Matthew Dumigan does not own shares in Tatton Asset Management.

G A Chester: Trans-Siberian Gold 

Trans-Siberian Gold (LSE: TSG) is a small but profitable miner with ambitions of becoming a premier mid-tier operator. Its strategy is to maintain a strong balance sheet, while both investing in growth opportunities and paying a base level of sustainable dividends through the commodities cycle. 

The base level’s set at around $3m a year (a 2.5% yield at the current share price), but the company regularly distributes more. This year’s interim dividend alone was $7m (5.9% yield). 

With its growth prospects and record of distributing surplus cash to shareholders, Trans-Siberian Gold is my top pick in the smaller companies space. 

G A Chester has no position in Trans-Siberian Gold.

James J. McCombie: Surface Transforms

Surface Transforms (LSE: SCE) recently won a contract worth £27.5m to supply an eighth global automotive customer with its high-performance carbon-ceramic brake discs. As a result, revenues should quadruple to £8m in 2022 versus 2020, and earnings per share should turn positive.

The high-performance brake market is worth £200m and growing, but a single supplier is dominant. Surface is now a credible alternative for manufacturers looking to diversify, and I think it will increase its market share significantly. 

Since electric vehicles need brake discs, Surface also looks good for the long-term, and I think it’s a great micro-cap stock pick.

James J. McCombie owns shares in Surface Transforms.

The post Top micro-cap stocks for November appeared first on The Motley Fool UK.

Why I think Inspecs is one of several UK shares to buy

I like several things about the firm. Firstly, it has an impressive record of growth. Since 2016, revenue, cash flow and earnings have all been rising fast. However, this year, Covid-19 has caused a temporary setback in progress.

Secondly, the company appears to be well-financed. Today’s half-year results report reveals there was a net cash position on the balance sheet of $10.5m at the end of H1 on 30 June.

And thirdly, the company is new to the stock market having joined the FTSE AIM market in February. I like to latch onto my potential millionaire-maker growth stocks when they’re young and vibrant. That’s when the boardrooms often have keen, entrepreneurial executives who are determined to make their mark.

However, I don’t think it’s a good idea to put all my investable funds into one share. My plan to make a million from growth stocks like Inspecs involves buying the shares of several candidates and compounding my gains over years.

Inspecs says its customers include global optical and non-optical retailers, distributors and independent opticians. The firm’s distribution network covers more than 80 countries with around 30,000 points of sale. Last year, just over 75% of its sales came from abroad and almost 25% from the UK.

Indeed, Inspecs has operations across the globe with offices in the UK, Portugal, Scandinavia, the US and China. Meanwhile, manufacturing takes place in Vietnam, China and Italy. Yet the firm’s market capitalisation is just £142m, which suggests there’s plenty of potential for the business to maintain its growth trajectory.

Organic and acquisitive growth

The directors’ growth plan involves the pursuit of both organic and acquisitive expansion and the extension of the manufacturing capacity. And construction work on a new plant in Vietnam has continued through the pandemic and will “shortly” be ready for production. Meanwhile, the acquisition of The Norville Group Ltd completed after the end of the reporting period.

Inspecs kept trading through the lockdowns, although business declined. Today’s figures show a 45% decrease in revenue year on year with an EBITDA slump of 89%. However, there was a recovery in sales and orders at the end of the first half which “continued to accelerate.” Looking ahead, the directors point out that sustained trading recovery depends on whether more lockdowns arrive or not.

City analysts following the firm are optimistic and have pencilled in a robust three-figure surge in earnings for next year. And with the stock near 190p, the forward-looking earnings multiple for 2021 sits just above 14. I  see price weakness now as an opportunity to buy some of the company’s shares.

The post UK shares to buy: why I’d pick this potential millionaire-maker stock right now appeared first on The Motley Fool UK.

One way around this is to build stakes in companies providing products or services that are deemed ‘essential’ to daily life. Since earnings should be relatively constant (or rising), there’s less incentive to check out early. 

Here are a couple of small-cap stocks with great growth prospects I think fit this strategy well. 

Eyes on retirement

New-stock-on-the-block Inspecs (LSE: SPEC) designs, manufactures and distributes eyewear frames to global retail chains. It may not quicken the pulse like a glitzy tech share but, for me, that’s part of the appeal. Some of the best investments are those that rarely make headlines.

Unsurprisingly, Inspecs was doing rather well before arriving on the market in February. In 2019, group revenue rose 6.9% to $61.25m and pre-tax profit more than doubled to $7.35m.

Of course, all this was pre-coronavirus. Like most businesses, the pandemic has motivated the small-cap to reduce costs and save cash where it can.  

Looking further ahead, however, the investment case becomes compelling. As CEO Robin Totterman stated in May: “The structural growth drivers in the $131 billion global eyewear market remain unchanged.” Moreover, the number of people requiring vision correction looks likely to increase as we learn more about the damage done from staring at computer screens and mobile phones for too long. 

It may be early days, but shares have done very well given what 2020 has thrown at investors so far. Had you bought in early April, you’d be sitting on a near-60% gain by now. This leaves the business trading at 14 times FY21 earnings. Considering the aforementioned growth prospects, that looks pretty reasonable.

The only thing I’d watch out for with Inspecs is the buy/sell spread. The larger this is, the more you’ll need the shares to rise just to get back to break-even. 

Long-term winner

If there was one lockdown trend that stood out for me, it was the huge demand for pets. This should be great news for leading veterinary service provider and online pharmacy operator CVS Group (LSE: CVSG) once the coronavirus crisis subsides. All those new, pampered family members will need regular care for years to come.

This isn’t to say CVS hasn’t been impacted by the pandemic. During lockdown, vets were restricted to undertaking only emergency work in their practices, leading to a “significant reduction” in revenue.

In response, the company temporality shut half of its small animal practices and placed half of its employees on furlough. Thankfully, a recovery in revenues to “pre-Covid-19 levels” since has led management to predict that full-year revenue will now come in “comfortably ahead of the prior year.”

Changing hands for 22 times forecast FY21 earnings, CVS is unlikely to appeal to committed value investors. Some may also be concerned by the company’s reluctance to comment on its earnings outlook or pay a final dividend.

For me, however, all this seems very prudent. With more local lockdowns looming, the move to permanently close 33 mostly-small branches, a proportion of which were loss-making, also makes sense. 

The short-term outlook may be foggy but I think CVS is a great pick for those building their wealth for retirement.

The post Have £2,000? Here are 2 essential UK growth shares I’d buy and hold for retirement appeared first on The Motley Fool UK.

David Barnes: Begbies Traynor

If you fear a second stock market crash or think the economy will struggle in the short term, I think a good hedge would be to invest in Begbies Traynor (LSE: BEG).

The insolvency and restructuring work specialist should see business demand surge as government support for companies is removed. The company is also a financial advisory and property services consultancy.

The firm has growing revenue and earnings per share, and uses acquisitions alongside organic growth to boost their financial strength.

Begbies Traynor trades at a fair price-to-earnings ratio of 16 and has a progressive 3% dividend that looks to be safely covered.

David Barnes has no position in Begbies Traynor.

Toby Aston: Anglo Pacific

Anglo Pacific Group (LSE:APF) is a global natural resources royalty and streaming company with a fantastic margins (52% profit last year). Its shares are down around 50% since last December, meaning the share price is a just 7 times earnings and at just 93% of book value. Management own around 7% of the shares which is encouraging.

It also pays a solid dividend yielding nearly 7%, which has doubled since 2016. This is all protected by a healthy dividend cover.  At 116p the shares are trading at low end of the 52 week range, despite analysts price target averaging 196p.

Toby Aston has no position in Anglo Pacific Group.

Royston Wild: Sylvania Platinum

Gold’s surge to record highs above $2,000 per ounce has dominated commodities-related chatter recently. But the yellow metal’s ascent due to rising safe-haven interest has dragged platinum group metals (or PGM) prices to significant highs as well.

Platinum has just struck multi-month peaks around $1,000 per ounce. And this has swept micro-cap stock Sylvania Platinum (LSE: SLP)’s share price to its highest since February. 

I’d buy the miner’s shares with the view that continued macroeconomic fears could drive their value even higher in the weeks and months to come. Sylvania’s low forward price-to-earnings (P/E) ratio of 11 times certainly leaves plenty of scope for additional share price gains.

Royston Wild does not own shares in Sylvania Platinum.

Tom Rodgers: Open Orphan

£96m market cap contract research firm Open Orphan (LSE: ORPH) is the world leader in testing vaccines and antivirals through its unique quarantine unit and on-site virology lab. 

Sales have been boosted by biotechs developing Covid-19 vaccines. But ORPH has large, long-term cash flow prospects far beyond coronavirus. 

A £4m contract with an unnamed global giant for a human challenge study into RSV is just the latest win. 2019 revenue was only £3.84m but that is expected to jump tenfold to £35m by 2021. 

Analysts think shares will more than double from today’s 14p price. 

I’m buying big. 

Tom Rodgers owns shares in Open Orphan.

Kirsteen Mackay: Trans-Siberian Gold 

Russian gold producer Trans-Siberian Gold (LSE:TSG) is a micro-cap stock that has caught my eye. With the price of gold ascending at an astounding rate, gold miners are reaping the benefits.  

Since the March market crash, the Trans-Siberian Gold share price has risen 165%. The £113m company has a price-to-earnings ratio of 14 and dividend yield close to 3%. It has maintained operations throughout the pandemic and delivered a positive set of results at the end of July. Its second quarter produced 46.9% higher average gold grades than its previous quarter. With the gold price continuing its ascent, I think the TSG share price will follow suit.  

Kirsteen does not own shares in Trans-Siberian Gold.

Matthew Dumigan: Jubilee Metals Group

Industry-leading metal recovery business Jubilee Metals Group (LSE: JLP) boasts an expanding multi-project portfolio with aims to increase both its geographical and commodity exposure. Operating in a rapidly expanding market, I think Jubilee is perfectly positioned to capitalise on increased demand for a reduction in the global footprint of mine tailings. 

Having become profitable for the first time this year, I’m impressed by the group’s recent financial performance. Moreover, as Jubilee continues to remain largely unnoticed by institutional investors (market cap: £115m), I think there’s a lucrative opportunity here for those willing to hold for the long term.

Matthew Dumigan has no position in Jubilee Metals Group.

Edward Sheldon: Keystone Law

My top micro-cap stock for August is Keystone Law (LSE: KEYS). It’s an innovative UK law firm that is disrupting the market by enabling lawyers to work from home or their own offices.

Keystone Law has grown at a rapid pace in recent years and I think it looks well-placed for growth in a post-Covid-19 world. I say this because its model is designed to service clients remotely.

KEYS isn’t the cheapest stock around. At the time of writing, its forward-looking P/E ratio using next year’s EPS forecast is about 36. However, I think this company deserves a premium valuation as it has a lot of potential for growth. 

Edward Sheldon owns shares in Keystone Law.

Rupert Hargreaves: Inspecs

Manufacturer of eyewear frames Inspecs (LSE: SPEC) is a unique business. The company is one of the few listed eyewear companies in the world, which gives it a defensive nature.

Indeed, the eyewear market is projected to expand at a compound annual rate of 8% for the next few years.  

Based on this growth, analysts reckon the company’s sales will double by 2021. This will leave the stock dealing at a forward P/E of 17.8.

The company’s double-digit profit margins and strong balance sheet also make it a prime dividend candidate.

Rupert Hargreaves does not own shares in Inspecs.

Rachael FitzGerald-Finch: Concurrent Technologies 

Shares in computer product manufacturer Concurrent Technologies (LSE: CNC) are growing nicely, like the company’s underlying financial fundamentals and investment metrics.

In fact, the share price is hovering around its 52-week high price point but is still trading on a price-to-earnings ratio of 22, below the industry average of 30. Given the competitive advantages of the firm, in the form of a growing an innovative product range, I am expecting further stock price growth.

I think Concurrent Technologies is a desirable micro-cap growth stock to hold as part of a balanced portfolio.

Rachael FitzGerald-Finch does not hold shares in Concurrent Technologies.

Anna Sokolidou: Ariana Resources

Ariana Resources (LSE:AAU), a small cap miner, explores silver and gold in Turkey.

Its shares have recently plunged a bit just like the two precious metals. In spite of the several months’ gold rally, the investors seem to be in a risk-on mode right now. However, I don’t really believe it will last for a long time. There are plenty of macroeconomic and geopolitical risks. So, in my view, gold and silver will rise in value pretty soon.

Although I consider small caps to be rather risky, their shares tend to surge more than their larger competitors’.   

Anna Sokolidou has no position in Ariana Resources.

Jonathan Smith: Mattioli Woods

Mattioli Woods (LSE: MTW) is a UK-based wealth manager. Financial performance through to the year end of May 31st was strong, with net inflows of around £200mn, despite the pandemic hampering the final few months. The firm has also been proactive with responding to the pandemic, taking on cost cutting measures with employee compensation, saving over £2.7mn in the process.

I’m also impressed with the drive and pro-activeness around growth aims. Only this month news broke of the successful acquisition of another wealth manager, Hurley Partners. This should aid long term growth via economies of scale.

Jonathan Smith does not own shares in Mattiolo Woods.

Kevin Godbold: Concurrent Technologies

Specialist designer and manufacturer of high-end, embedded computer boards for critical applications, Concurrent Technologies (LSE: CNC) had a ‘good’ coronavirus crisis. We last heard from the company in June. The directors said the order book is “strong” and the company maintained production through the lockdown.

The firm serves the military, aerospace, communications, industrial, transport and scientific sectors. It’s a good business, which shows in the robust multi-year record of rising cash flow and dividends suggesting the enterprise has defensive qualities. As we emerge from recession, I think the firm looks well placed to thrive. I’m backing the micro-cap stock for August and beyond.

Kevin Godbold owns shares in Concurrent Technologies.

G A Chester: Sylvania Platinum 

Sylvania Platinum (LSE: SLP) has built a record of strong operational performance in recent years. This is founded on its low-cost, low-risk extraction of platinum group metals (PGMs) from chrome tailings in the renowned PGM-rich Bushveld Igneous Complex in South Africa. 

The company’s strong operational performance has been matched by a sensible financial strategy. It’s debt-free. It’s strong cash flows fund capital expansion and process optimisation projects. And also support opportunistic share buybacks and shareholder dividends. 

Adding a single-digit earnings multiple to the strong management and focus on shareholder value makes Sylvania my top stock to buy right now. 

G A Chester has no position in Sylvania Platinum.

Roland Head: Somero Enterprises

I’ve been using this year’s market crash to buy shares in high-quality businesses trading at knockdown share prices. One micro-cap stock I think looks very attractive at the moment is Somero Enterprises (LSE: SOM).

This US business makes high-precision equipment for laying perfectly flat concrete floors, such as those required for ecommerce warehouses. The company went into the COVID-19 crash with a strong order book and reported net cash of $28m at the end of June.

Management say it’s too soon to give guidance on current market conditions. But Somero looks cheap to me on just eight times forecast earnings. I rate the shares as a buy.

Roland Head does not own shares in Somero Enterprises.

Andy Ross: Franchise Brands

Franchise Brands (LSE: FRAN) is a franchisor. Its franchises include consumer-facing ones such as ChipsAway and Ovenclean as well as business to business ones such as Metro Plumb and Willow Pumps.

I like that management are experienced operators. The executive chairman spent 21 years at Domino’s, which operates a franchise model. A number of the board and other senior management personnel also worked at Domino’s so know the industry well.

It’s an entrepreneurial company which has made acquisitions and retains talent within the business.

Franchisors can make good margins because it’s an asset light business model and I think that bodes well now and in the future.

Andy Ross does not own shares in Franchise Brands.

Paul Summers: Somero Enterprises

I think laser-guided equipment specialist Somero Enterprises (LSE: SOM) is a great buy for the long term. It’s the clear leader in a niche market and generates consistently high returns on capital employed.

Recent trading has been inevitably tough. However, Somero remains profitable and cash generative and would likely remain so even if revenues were to fall an additional 20%. It also has $28m in net cash to weather the coronavirus storm.

Those looking for a quick return probably won’t find it here. However, anyone intending to stick around for the next infrastructure boom could be richly rewarded. The shares look cheap at just 8 times forecast FY20 earnings.

Paul Summers owns shares in Somero Enterprises.

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