STOCKPICKER
WHAT I BOUGHT LAST
SVS CHURCH HOUSE TENAX
ABSOLUTE RETURN STRATEGIES
CHANGE AIM
Nexus IFA’s Kerry Nelson is using this fund until she gets a
clearer picture of the investment environment
Rathbones’ Jo Rands and Alexandra
Jackson name three AIM stocks
undergoing a change that should see them
deliver better earnings and cash-flow
T
W
E ARE ALWAYS SEARCHING FOR
COMPANIES that are capable of
transforming into “something greater”.
And, in our view, where better to find
these than AIM? AIM is relatively illiquid
and high risk, however, so we are careful to hold only
a small proportion of our portfolio in this part of the
market. We target companies undergoing some kind
of change that will lead to better earnings and greater
levels of cash-flow. This could be an external change,
such as growing demand for its wares, or it may be
internally generated, such as a new chief executive
with a plan to improve the business.
ACCROL GROUP MAKES
TOILET PAPER, kitchen roll and
tissues sold by discount retailers.
Aggressive pricing by stores such
as B&M, Aldi and Lidl has helped
them take market share from larger
stores, a dynamic likely to gather
momentum, and Accrol recently
bought new machines to increase
production as its clients try to fill a
growing number of shelves. Unlike
its competitors, Accrol doesn’t
pulp its own paper, which gives it
flexibility and lets it shop around
for a better deal. There is a risk of
paper becoming more expensive
to buy after the fall in sterling,
however, and Accrol is one of the
smaller players in the market.
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BREEDON GROUP QUARRIES
AGGREGATES (stones, gravel and
sand) and makes cement mix and
asphalt used in laying roads and
building foundations. Infrastructure
in the UK is in dire need of
development and UK politicians of
all stripes support greater spending
on this sector, which should benefit
Breedon. We also like its lean
management team which is close
to day-to-day operations. That has
helped Breedon buy several smaller
rivals and boost earnings – a tactic
central to its strategy. Breedon
will be vulnerable if construction
spending tails off, so we are keeping
an eye on the sector’s output and the
strength of the UK economy.
GB GROUP IS A NICHE
TECHNOLOGY COMPANY,
supplying firms with identity
verification and fraud prevention
software. This work dovetails
with general customer analytics
and it is starting to help clients
determin