AIM ideas for ISA customers

The move to allow direct investment through an ISA comes ahead of the removal of stamp duty on AIM listed stocks next April.

The Tax Incentivised Savings Association has announced that AIM stocks will become qualifying investments into ISAs from 5 August.

AIM ideas for ISA customers

AIM ideas for ISA customers

Equity transactions in AIM-quoted companies already make up nearly a third of the share dealing activity of execution-only investors and Gavin Oldham, chief executive of The Share Centre, said he anticipates an upsurge of demand after the rules come into force.

“While investors’ decisions must be on their individual circumstances and risk appetites, the move allows investors to take advantage of a much wider range of stocks offering both growth prospects and value,” he said.

Until 5 August investors still have limited access to AIM listed stocks either through a self invested personal pension or through the small pool of AIM stocks that are dual listed on foreign stock exchanges.

The move to allow direct investment through an ISA comes ahead of the removal of stamp duty on AIM listed stocks next April.

Below is a selection of AIM listed stocks to consider by Helal Miah, investment research analyst at The Share Centre.

Incadea

Incadea is a software company whose products aim to improve the performance and efficiency for car dealerships and since coming to the market in May 2012, the share price has made steady headway. The company has a presence in around 80 countries and 2,000 dealerships, with established relationships with BMW, Nissan, Mercedes and VW.

It is currently concentrating on developing into emerging markets, especially the BRIC markets (Brazil, Russia, India, China), where opportunities are far greater than parts of Europe. The April results showed Incadea is making excellent progress with increased demand from clients and this is expected to be reflected in an improving revenue stream.

As expected, a first dividend for shareholders was announced. This is a higher risk smaller company idea for the medium to longer term, which is establishing itself across the globe in a niche market. According to forecasts the group is trading on a P/E of around 12.6 times this year’s earnings.

Amerisur Resources

As this is a small oil and gas exploration firm operating in a potentially unstable region, it represents a very high risk investment. In terms of exploration, the company has made significant progress in recent years, turning exploration projects into productive assets. The current total production level is 8,500 barrels of oil per day (bopd). The target is to double the 2012 production rate by the end of 2013. With production increasing at a rapid rate, the company is expecting to build on last year’s performance with net margins expected in the region of 45% higher, helped by the fact that the company has no debt on its books.

Mulberry

The luxury goods sector as a whole has come under some pressure recently, partly as a result of concerns over Chinese and global growth. However, Mulberry’s weakness has been more to do with its heavy focus on the UK and European markets where the economic conditions have been much weaker.

However, we believe that for the high-risk investor this represents an entry point for long-term investment into a stock that has the potential to see significant demand growth. Also, the potential will be increased if it manages to shift its sales focus to emerging countries such as China where the evolving demographics favor luxury goods. Other luxury brands are doing extremely well from Asian demand and we believe that Mulberry can prosper too.

Monitise

There has been renewed interest in Monitise from investors due to news that it had completed a new deal with Telefonica, following recent deals with Lloyds and Visa Card Europe. Plus, hedge fund manager Leon Cooperman, saying he believes the stock is a “five bagger”. The US market is huge for Monitise and over 200 institutions have signed agreements. However the jewel in the crown is the deal that was arranged with Visa Inc, this gives Monitise access to Visa’s 1.7 billion cardholders.

Monitise reported interim results that show the company continues to confidently head in the right direction. Also, the company’s global ambitions have been helped by the acquisition of their peer, Clairmail, in the US for $173m in shares, and once amalgamated the group should be set to break even by late 2014. We continue to recommend investors buy Monitise for a high-risk, early-stage investment opportunity. The company continues to attract high caliber partners and customers, helping to firmly integrate its proposition as the preferred interface between financial institutions and their customers globally.

Hutchison China Meditech

There are three divisions to Hutchinson China Meditech – the Healthcare division, Drug R&D, and the Consumer Products Division. One of Chi-Med’s products has made it to the Chinese essential list of medicines, of which there are only around 370.

The business is focused primarily on China. The benefit of this is that as the Chinese population becomes more affluent there is a significant upturn in those signing up for medical insurance and also by the government on national healthcare. To give an indication of the potential market, the average spent on healthcare in the US is just above $7,000 per person per year while the average in China is about $150. There has been positive news flow about joint ventures and drug trials. However, this is a high-risk buy idea for investors seeking exposure to China.

AIM Ideas for ISA Customers & Equity Release

What Is Equity Release?

Equity release is the use of financial arrangements that provide the owner of a house, or other property, with funds derived from the value of the property while enabling them to continue using it.

How Does Equity Release Work?

Equity release is aimed at homeowners aged 55 and over. It allows you to take some of the value of your home as cash.

Investments on Equity Release

You can use money received from equity release to spend on anything that you wish (providing that it is legal). There are no legal restrictions in place on the use of the loan. However, different lenders and financial advisors may restrict some of the use of funds.

Editorial Note: This content has been independently collected by the EveryInvestor advisor team and is offered on a non-advised basis. EveryInvestor may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.
Taylor Holt - 300x300

Written by
Taylor Holt
Estate Planning Expert

Taylor Is Our Resident Estate Planning Expert. He Knows That Everything Revolving Around Wills or Funeral Planning Can Be a Sensitive Subject That People Don’t Like to Discuss. But He Also Knows How Important It Is to Know All There Is to Know About It. Taylor Makes It His Mission to Spread Awareness About Estate Planning, and We Believe Everyinvestor Is the Best Platform to Do That.

Monique - 300x300

Written by
Monique Pittman
Pensions Expert

Monique Is Our Resident Pensions Expert. Many People Postpone Planning Out Their Pension, Thinking That Is Something They’ll Have to Worry Much Later in Life. Monique Knows How Important It Is to Start Planning Your Pension Early, and She Wants You to Know It Too!

Written by
Lisa Schilling
Insurance Expert

Lisa Is Our Resident Insurance Expert. She Knows How Important It Is to Be Ready for Any Scenario, Especially When a Family Member Is Involved. Nobody Likes Being Found Unprepared in a Tough Situation! Lisa Can Find the Best Insurance to Cover Your Every Need, Present and Future.

Doyle Edwards - 300x300

Written by
Doyle Edwards
Mortgages Expert

Doyle Is Our Resident Mortgages Expert. He Comes From a Long Line of Financial Gurus, and It Truly Shows. Despite His Young Age, There Is No Question He Cannot Answer When It Comes to Mortgages, and His Ability to See Outside of the Box to Find the Best Mortgage Deals Is Truly Impressive.

jason stubbs 300x300 1.jpg

Written by
Jason Stubbs
Equity Release Expert

Jason Stubbs Is a Specialist in the Equity Release Sector. He Enjoys Helping Older People Who Are Struggling Financially Get Out From Under Financial Pressure.

rachel w.jpg

Rachel Wait
Personal Finance Journalist

Rachel is an experienced finance journalist and editor with a particular interest in personal finance and consumer affairs. She has vast experience writing about money issues, property, insurance, and consumer affairs, and you’ll find her articles regularly featured in top media and newspaper publications.
francis.jpg

Reviewed by
Francis Hui
Senior Risk Manager

Having held various high-level roles across the industry, Francis is truly an expert in aiding UK citizens in their financial decisions and risk analysis. His unique insight and statistical knowledge make him the perfect person to help you take your financial future to the next level.
Mark Patterson

Written by
Mark Patterson
Mortgage Expert

Mark Patterson is a well-known expert in mortgages. He has been working as an expert for over 15 years, and he specializes in the UK mortgage market.
kath icon.png

Katherine Read
Consumer Affairs Writer

She writes on the topics of equity release, home reversion, and mortgages.

Nicola Date

Nicola Date
Writer & Journalist

Nicola is a financial writer for EveryInvestor and is passionate about the opportunities that equity release can open up for homeowners. Her extensive business experience and deep understanding of the industry means that she’s always up-to-date with the latest developments.