Which of these 2 buzzing AIM stocks should you buy?

Highlights 

• Ceres’ H1 2021 revenue rose by 96 per cent to £17.4 million due to progress on building strong commercial partnerships.
• Alba recently divested its mining assets in Greenland to its Greenland focused spin-off vehicle GreenRoc Mining.

The UK’s macro environment has been impacted by a deepening energy crisis, ongoing supply chain challenges and rising inflation concerns.

Thus, investors who are seeking unique and relatively untapped investment opportunities can look at stocks listed on the London Stock Exchange’s junior market the Alternative Investment Market (AIM).

The AIM platform has also seen a boom in initial public offerings recently. According to data from advisory firm BDO, the AIM platform saw 20 new IPOs listed in Q3 2021 alone, which raised a total of £468 million. This is an increase of 353 per cent from the amount raised in Q3 2020.

Also, AIM stocks have not been as impacted by the pandemic as their main market counterparts, as AIM consists of a more diversified group of industries compared to UK’s major indices. Thus, investors may choose to look at some AIM quoted companies with high growth characteristics.

Let us take a closer look at 2 AIM listed stocks and how they have performed:

1. Ceres Power Holdings PLC (LON: CWR)

Ceres Power is a green energy company focused on fuel cell technology. The company reported an H1 2021 revenue and other income of £17.4 million, up by a whopping 96 per cent from £8.9 million in H1 2020. The growth was due to Ceres’ progress in building strong commercial partnerships.

Its H1 2021 gross profit rose to £12.2 million, compared to £7.1 million in H1 2020.

The company has forecast its FY 2021 revenue to be around £31.5 million, in case of no unexpected impact on its operations.

(Image source: Refinitiv)

The company’s shares were trading at GBX 943.50, down by 5.46 per cent on 6 October at 10:20 AM BST. Comparatively, the FTSE AIM UK 50 Index, which it is a part of, was trading at 6,392.28, down by 1.70 per cent.

Meanwhile, the energy sectoral index was at 5,920.75, down by 2.02 per cent.

Ceres Power’s market cap was at £1,901.87 million, and it had a one-year return of 44.17 per cent as of 6 October 2021.

2. Alba Mineral Resources PLC (LON: ALBA)

Alba Mineral Resources is a gold ore and other minerals mining company.

Alba recently divested its mining assets in Greenland to its Greenland focused spin-off vehicle GreenRoc Mining.

GreenRoc was admitted to the AIM exchange and started trading under the ticker symbol GROC on 28 September. Alba holds a majority shareholding of 54 per cent in GreenRoc.

The company is set to record an investor question and answer session this week, hosted by media group Vox Markets. The video session is expected to be published later this week, on 8 October.

(Image source: Refinitiv)

The company’s shares were trading at GBX 0.20, down by 4.88 per cent on 6 October at 09:18 AM BST. Comparatively, the FTSE AIM All-Share Index, which it is a constituent of, was trading at 1,200.79, down by 1.43 per cent.

Meanwhile, the industrial metals and mining sectoral index was at 5,768.46, down by 2.29 per cent.

Alba Mineral’s market cap was at £13.13 million, and it had a negative one-year return of 53.11 per cent as of 6 October 2021.

Bottom Line

Energy transition to impact Ceres: Alternative fuel companies have gained focus recently as the government seeks to improve UK’s energy security, especially as petrol prices are nearing record highs.

The global fuel cells market is forecasted to grow at a compound annual growth rate (CAGR) of 26 per cent by 2027, according to market research firm BlueWeave.

Demand for EVs to benefit Alba: One of Alba’s divested projects includes the Amitsoq graphite project.  As graphite has been found to be useful in the manufacture of lithium-ion batteries, the company stands to benefit from the rise in demand for electric vehicles (EVs). EVs are powered by lithium-ion batteries.