Saturday May 25, 2019
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PERSONAL, UNDILUTED VIEWS FROM TOM WINNIFRITH

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What sort of monster has AIM become?

Please share this article with your comrades in revolutionary capitalism

- Tom Winnifrith

Originally appearing behind the paywall of my Nifty Fifty site, I felt this piece merited a wider airing: I am indebted to the CEO of an AIM listed company for this back of the envelope analysis of the c1200 companies on AIM.

“If one excludes the loss makers within the index, the universe of actually profitable becomes 200. At this point, on those 200, the average PE is 38. If I then cull all those with a PE over 12, I’m immediately down to 48 companies. Picking low risk companies on AIM is going to be tough. That should not be a surprise though hey?!

Can this be true? Amazingly it appears to be the case. Just 4% of companies on AIM are what one might term traditional value buys. Of course, there will be some within that 48 which have other problems but equally, I suppose there will be some on PEs of greater than 12 where PEG analysis shows them to be cheap. But overall it is a pretty poor showing.

Indeed, what of the 80%+ of AIM which are loss makers?

Read the full article on SpreadBetMagazine | Comments
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