It’s new issues time again. That’s great news for penny share investors. And I have to admit – it is great news for me as well. You see, I like a bit of variety in my life.
Stick to the top hundred companies of the FTSE index and the same old names stare back at you. Every day it is BP vs Shell, AstraZeneca vs Glaxo, Sainsbury vs Tesco. It is you against every professional in the City and every other investor who daren’t take the plunge with small companies.
But down at the penny share end the cast is ever changing as newcomers take their place upon the stage.
Hopefuls hint at the next big gold play, the next technology breakthrough, the next oil discovery. It is like a talent show. Who looks the part? Who shows the most promise? Who has something that no-one else can offer?
Why things are looking up on AIM
Back in the peak year of 2005, 519 new companies made their bow on London’s Alternative Investment Market (AIM).
Last year, investors put up the shutters and only 36 new entrants arrived. But now the tide is turning. Eight newcomers made their debut in January and February and a similar number should make it in March and April. Let us run out eye over five of them.
Oxford Nutrascience (LSE:ONG): Oxford Nutrascience plans to launch a range of healthy tablets based on pre-biotic soluble fibres. This is a new type of ingredient that has digestive health benefits which, because they can replace sugars, can improve taste. These functional properties make them ideal for the delivery of medicines, especially for those who find it difficult to swallow tablets.
Oxford has one calcium chew called Ellactiva on the market. It is planning to launch several more pleasant-tasting chewable tablets, while also delivering some form of medicine, vitamins or supplements. Shares are valued at 3.4p, while Oxford is valued at £15m, which looks aggressive in relation to last year’s sales of just £43,000.
Scotgold ReSources (LSE:SGZ): Scotgold is an Australian company that has seen fit to come all the way to Scotland to look for gold. It owns the Cononish gold and silver deposit and three exploration licences in the Grampian region.
An independent report in 2004 calculated that Cononish has 163,000 ounces of gold and 596,000 ounces of silver in the measured, indicated and inferred categories. The British Geological Survey has repeatedly said that there are significant deposits yet to be discovered in the region.
Scotgold plans to bring Cononish into production by the end of 2011, for which it will need to raise additional capital. At a share price of 6.75p Scotgold is valued at £8m.
Specialist Energy (LSE:SEGR): Specialist Energy is the latest owner of one of the UK’s oldest engineering companies, Hayward Tyler. From its headquarters next to Luton Airport, Hayward Tyler is the world’s leading supplier of boiler circulating pumps. Its equipment is installed in 70% of North America’s nuclear power stations and it recently developed the world’s largest subsea motor for use in the North Sea. Sales to India and China, where it already has an installed base of 520 pumps, are the main driver of growth.
Digital Barriers (LSE:DGB): Shares in Digital Barriers have raced to a 35% premium to their 100p issue price, which owes everything to its management team, led by Tom Black. Black was boss of Detica, a specialist security consultancy that delivered a 30% per annum return to its shareholders in the period 2002-8.
We are talking about surveillance technology here and Black sees the need for “investment to improve the digital security and surveillance technology needed to protect high-profile targets, crowded spaces and the critical national infrastructure”.
CSF (LSE:CSFG): CSF looks like a good way to play the rapid growth of Asia’s ‘knowledge economy’. CSF runs two huge data centres in the Cyberjaya technology park outside Kuala Lumpur. The main tenant of these data centres is the Malaysian government’s telecom provider, TM Net. But CSF has attracted other multinational businesses who see Malaysia as a good base from which to attack the Asian market.
Data centres house networking and computing equipment such as servers, routers and fibre optic transmission gear. Big users are increasingly seeing the sense of outsourcing these services demand is rising rapidly. CSF is planning to build a third, and even larger data centre at Cyberjaya, and also to expand into Thailand and Vietnam.
There is plenty of variety here and there will be more debutants coming along soon. I can’t wait to pick out the likely winners!
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This article
was written by Tom Bulford, and is taken from his free twice-weekly email
The Penny Sleuth
.