AIM Focus: Broker and Tipster Sentiment

It’s been an eventful week on AIM. Patisserie Holdings’ (CAKE) announcement of “significant, and potential fraudulent, accounting irregularities” on Wednesday blindsided the investment community. Urals Energy (UEN) is comparatively smaller, but the company’s discovery of an unauthorised loan made with its funds – meaning the firms “working capital position will be significantly constrained” – brought some more unwanted bad press; UEN shares slid 31.3% since the announcement. With AIM firms making the news, we take at the current state of broker and tipster sentiment towards AIM over the last 31 days.

A previous blog article back in June showed that tipsters can offer a more balanced view of new AIM companies, as house brokers are often likely to award ‘buy’ ratings and there is little motivation for brokers to assign ‘sell’ ratings to AIM firms. A quick look at the charts below reiterates that point. Each square in the below grid represents an AIM-listed company, and the colour represented average tip sentiment towards that company over the course of the last month.

First, we narrow our search down to tips made by tipsters. Tipster tips far outnumbered broker tips over the month, mainly due to the AIM focus of online publications such as ShareProphets. The chart shows there’s a perfect split: 143 AIM companies have been tipped in the last 30 days, of which 42.66% have consensus positive and 42.66% negative sentiment. The most-frequently tipped companies in the ‘buy’ sentiment category include Premaitha Health (NIPT), Ariana Resources (AAU) and Union Jack Oil (UJO). On the other end of the scale, Haydale Graphene Industries (HAYD) and Tern (TERN) have received a number of reiterated sells over the course of the month. Right in the middle we have Boohoo Group (BOO), which received a buy, two holds and a sell over the course of the last month.

AIM Companies: Tipster Sentiment (Last 30 Days)

When we instead narrow down our search to broker ratings, the outlook couldn’t be more different. Of the 125 AIM shares tipped by brokers, 118 were firmly in positive territory, and only 1 received negative consensus sentiment. The one sell? Firestone Diamonds (FDI), recipient of a single sell rating from Berenberg. Strix Group (KETL) received the most ‘buy’ ratings from brokers during the month, closely followed by Clinigen Group (CLIN) and ASOS (ASC). Abcam (ABC) remains stuck in the middle, with three ‘hold’ ratings.

AIM Companies: Broker Sentiment (Last 30 Days)

The conclusion? When it comes to the less frequently tipped AIM, it’s clear that tipsters can offer a diverse range of opinions. With that in mind, in can be worth keeping your ears to the ground to see what the tipsters, as well as the brokers, are saying.

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Disclaimer: The contents of this article should not be considered financial advice. All information displayed as at 12th October 2018.