How to hunt down the best Aim stocks

There are three key factors to look for if you want to find the most promising stocks on the UK’s junior market, says Michael Taylor of Shifting Shares.

Fever Tree drinks mixers
Fevertree: a company with great ROCE © Fevertree
(Image credit: Fever Tree drinks mixers)

Aim (sometimes called the Alternative Investment Market) is London’s less-stringently regulated junior market. It’s designed to help young, small companies with potential for rapid growth (and unfortunately that’s often all it is: potential) to raise capital from interested investors. And there are certainly tempting-looking opportunities. Aim has produced a handful of extraordinary winners, such as Domino’s Pizza and online retailer ASOS, which have paid out spectacular returns to investors who got in early. However, it’s very much a stock-picker’s market – this is not a market for passive investing or index trackers.

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Michael Taylor is an ex-trader. For more from him, see shiftingshares.com.