Three Aim-listed firms that will thrive in a post-Brexit world
Matt Tonge and Victoria Stevens of the Liontrust UK Smaller Companies Fund pick three Aim-listed firms that will survive Brexit turmoil.
Two professional investors tell us where they'd put their money. Matt Tonge and Victoria Stevens of the Liontrust UK Smaller Companies Fund pick Aim-listed firms that will survive Brexit turmoil.
With Brexit looming, a key question for investors is the potential impact on smaller listed companies. If we leave without a deal, many that rely on our links with the EU will suffer short-term turbulence as we all get used to a new trading environment.
The problem of tariffs has already been largely offset by a weaker pound, but red tape and logistical problems could prompt some small caps' customers to look elsewhere to ensure their supply chains remain uninterrupted.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
In this environment, companies shielded from strong competition in their industries are likely to prove the most resilient. One of the most powerful barriers to entry for potential competitors, we believe, is intellectual property: patents, copyrights, trade secrets or know-how that competitors struggle to replicate.
All three of the following companies base their businesses on intellectual property, and their customers would struggle to replace them even if disrupted trade made them inclined to do so.
Protecting offshore wind farms
Since spotting a gap in the market in 2009, Tekmar Group (Aim: TGP) has become the world's leading supplier of cable protection systems for the offshore wind market. Its patent-protected Teklink system has been installed in the harsh environments at the base of offshore wind turbines over 6,000 times since the company was founded without a single failure to date. The technology replaces older systems that are unreliable, more difficult to install and more expensive. Tekmar has captured a dominant market share, and with the cost of producing offshore wind now roughly on a par with extracting fossil fuels, demand for this clean source of fuel is sure to keep growing.
Driving robots
Great British engineering is also on display at AB Dynamics (Aim: ABDP), which supplies the global motor industry with advanced testing systems. These comprise driving robots and guided soft targets, allowing car manufacturers to drive their cars around test tracks in a precise and repeatable manner, thus testing the performance of increasingly popular advanced driver-assistance systems.
AB Dynamics has little global competition. Moreover, Euro NCAP, a Brussels-based European transport industry body focusing on car safety, has begun using the company's products in crash tests. This bodes well for broader industry adoption.
Profit from paper
Finally, we would look to paper manufacturer James Cropper (Aim: CRPR), based in Burneside, Cumbria. This company has applied skills honed over nearly 200 years of paper production products include book bindings and digital photography paper to high-performance non-woven materials, which is where their intellectual property comes in.
James Cropper's technical fibre products division is a world leader in the production of non-woven "veils" extremely light sheets of fibre that add specific performance qualities to composite materials, such as durability, strength or fire retardancy. The veils are used in a variety of applications, from hydrogen fuel cells to Lockheed Martin's F35 fighter jets.
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
Inflation forecast: where are prices heading next?
Updated inflation forecasts were published alongside Rachel Reeves’s Autumn Budget on 30 October. How quickly will prices rise over the next few years?
By Katie Williams Published
-
Ryanair profits dive as passengers hold out for lower fares – should you invest in airline stocks?
Europe’s largest low-cost airline said on Monday that net profits had fallen by 19% to €1.79 billion for the six months to the end of September
By Chris Newlands Published
-
Somero: trading this overlooked bargain
Features Mechanical-screed maker Somero dominates its niche and is attractively valued. Matthew Partridge picks the best way to trade it.
By Dr Matthew Partridge Published
-
How to find big profits in small companies
Cover Story The small- and micro-cap sectors are risky and volatile. But with careful research and patience, investors could make huge gains. Matthew Partridge explains how to find the market’s top tiddlers.
By Dr Matthew Partridge Published
-
The hidden gems on Aim, London's junior market
Features Aim, London’s junior market, is risky – but you can find solid stocks at low prices. Scott Longley reports.
By Scott Longley Published
-
Small and mid-cap stocks with big potential
Opinion Professional investor Guy Anderson of the Mercantile Investment Trust selects three small and medium-sized firms with promising prospects that the market has missed.
By Guy Anderson Published
-
Three solid Aim stocks to buy now
Features Many Aim-listed stocks if held for two years, are exempt from inheritance tax. Here, professional investor James Rae picks three Aim stocks to buy now.
By James Rae Published
-
Three great growth stocks to buy
Opinion These three Aim shares not only offer great growth potential, but they can also cut your inheritance bill, says professional investor Justin Waine.
By Justin Waine Published
-
A high-risk bet on the rise of mobile money
Features Mobile banking is set to be the next big thing. And a deal just signed means this small technology company could become a major player, says Ed Bowsher.
By Ed Bowsher Published
-
When it comes to stocks, it makes sense to buy small
Opinion Good-quality smaller companies will continue to do well, says professional stock picker Ed Beal. Here, he picks three small-cap stocks to buy now.
By Ed Beal Published