The rationale is simple: it seems a reasonably well run business with a solid balance sheet, on a very cheap rating on classic value metrics, probably due to the cyclical business and recent acquisitions. It also diversifies me a bit from my usual fare of packaging companies and pipe manufacturers. On a macro level it could benefit from big banks withdrawing from some areas due to regulatory headwinds.
Back to the future: AIM 2012 IPOs
Talking of AIM IPOs, on a tangential point I’ve been looking at the historical list of AIM IPOs and been through all of 2012 ones, to see if there was something to be learned from their fate 3 years later. Taking out investment vehicles, Chinese/Malaysian companies (mostly frauds, very fashionably that year) and resource companies (oil and gas, miners, not all fraud but a lot of dodgy stuff and I’m not covering that sector) we’re left with just 10 companies still standing. A couple of the 2012 listings apparently got taken over legitimately, and a couple of bankruptcies might have been non fraudulent failures but what a track record.
I’ve been wondering if there might be modest alpha in a simple “IPO survival” strategy. It seems the get-rick-quick schemes drop like flies quite quickly. The remaining businesses are probably legit although it’s still a mixed bunch. It may have been a bad year.
Here’s the list of 2012 AIM IPO survivors (ex invest. cos, China and resources):
|VENN LIFE SCIENCES||Health Care Providers|
|CLINIGEN GROUP||Drug Retailers|
|GOOD ENERGY GROUP PLC||Alternative Electricity|
|BELVOIR LETTINGS||Real Estate Services|
|UTILITYWISE||Business support services|
|RETROSCREEN VIROLOGY, now HVIVO||Biotechnology|