10 most-bought AIM shares in 2017

AIM is up 22% in 2017, but which have been the most popular shares? Graeme Evans reveals the stocks investors just had to buy this year.

Among the oil explorers and mining firms dominating our 2017 list of most-bought AIM stocks sit two stock market gems in Boohoo.com (BOO) and IQE (IQE).

The pair have rewarded investors handsomely this year, with semiconductor wafers firm IQE up another 265% on the back of its reported role in Apple’s new iPhoneX.

Boohoo, meanwhile, is up 45% as it continues to put other retail stocks in the shade with a performance that draws comparisons with bigger rival ASOS (ASC).

The online fashion retailer hit a record high of 266p in the summer following a string of broker upgrades, but has fallen back since then amid concerns that a £3 billion valuation may not have been fully justified.

But Deutsche Bank recently named Boohoo as one of its top three picks in the retail sector, alongside Primark owner AB Foods (ABF) and discount retailer B&M (BME).

It said that the recent share price weakness caused by concerns about margins had made the online fashion retailer an attractive bet again.

Investec Securities is also a fan, with the broker believing a 2018 PE ratio of 56x is well supported by the group’s ability to deliver 25%-plus annual growth in sales and earnings. Investec has a price target of 270p.

Manchester-based Boohoo, which targets the 16-30 age range, has enjoyed stunning returns from its 2017 acquisition of PrettyLittleThing, with half-year sales growth of 289% to £72.7 million.

Helped by a rapidly growing social media following, the group will be hoping to repeat the success with its other recently acquired brand, NastyGal.

Ticker Company 1 UKOG UK Oil & Gas Investments 2 SXX Sirius Minerals 3 IQE IQE 4 FRR Frontera Resources Corporation 5 AST Ascent Resources 6 HUR Hurricane Energy 7 BOO Boohoo.Com 8 SOU Sound Energy 9 88E 88 Energy 10 PREM Premier African Minerals

For IQE, the surge in its share price is being driven by investor excitement over its photonics division. Facial recognition in mobile phone handsets is one potential use of its VCSEL wafers, as well as for Internet of Things applications or to reduce energy demand at high volume data centres.

IQE, which doesn’t pay a dividend, shot to fame during the 1999-2000 tech boom, reaching £7, before falling back to earth. The question for investors is whether IQE is a growth or cyclical stock, and whether it is able to replicate ARM Holdings, which was recently bought by Japan’s Softbank for £24 billion.

IQE’s popularity among AIM investors is matched by drinks firm Fevertree (FEVR), which sits just outside our list of top 10 most-bought stocks. It was recently named AIM Company of the Year, having been picked out of a shortlist that also featured IQE and Boohoo.

Shares are 1,500% higher than when it listed on AIM in November 2014, amid consistently strong demand for its upmarket tonic waters and mixers in the UK and overseas. It has upgraded its profit forecasts five times in the past 12 months.

Last month, Investec Securities analyst Nicola Mallard said there was no reason to think the share price will fall flat as she reiterated her ‘buy’ rating alongside a target price of 2,330p.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.