The London Stock Exchange is in a pickle. Fewer than 20 companies have joined it this year while almost 90 have left, with several heading to New York instead.
It is not hard to see why. The flagship S&P 500 index rose almost 25 per cent over the past 12 months, while its tech-heavy sibling the Nasdaq soared more than 30 per cent.
The FTSE 100 index of Britain’s largest listed companies managed to stay in positive territory, but a 4 per cent rise seems pallid next to the rosy complexion of the US markets.
And the Aim index of smaller UK firms looks even more anaemic, having fallen for the fourth year in succession, almost halving in value since 2021.
Fortunately, Midas has beaten both the FTSE and Aim this year. There have been a few disappointments, admittedly, but most recommendations are moving in the right direction and some have made exceptional progress.
Technology is a pervasive theme, with the greatest gains reported by those using innovation to drive growth.
Sulnox
First prize this year goes to Sulnox, with products that help to make fuel go further – saving money, cutting emissions and improving engine performance.
Sulnox is traded on the Aquis Stock Exchange, which is designed to support fast-growing companies. Midas recommended the stock in January when the shares were 24p. They have soared almost three-fold since then to 69p as the firm has expanded its reach, won new customers and gained support from deep-pocketed veterans of the marine industry.
There are more than 100,000 ships at sea, guzzling through about 300 million tons of fuel each year. The entire industry is under pressure to reduce harmful emissions, and Sulnox offers a natural additive that does not just cut ships’ carbon footprint but also helps them to save money.
For investors who snapped up shares at the beginning of the year, the strong performance poses one key question: can this party continue?
Supporters – and there are quite a few of them – believe the answer is a resounding ‘yes’.
Sulnox has gained a flotilla of fans, from shipping magnate Constantine Logothetis to Norwegian investment firm Nistad, and, most recently, US marine giant McQuilling Partners. Vessels are trialling Sulnox and seeing substantial reductions in fuel consumption, while support from McQuilling should help Sulnox chief executive Ben Richardson to broaden his network in the all-important American market.
Richardson is moving into other industries, too.
A recent study showed industrial generators can slash emissions using Sulnox additives, which could drive demand across industries from mining to construction.
The products can be used on almost any vehicle, simply poured into the fuel tank to cut costs and improve engine performance. Particularly appealing in some African countries, where cars are often old and guzzle gas, Sulnox wares are also on sale here, via Amazon and other online retailers.
Top-tier low-cost products, easily applied, influential investors and interest from around the world – it all creates a potent cocktail.
Sales for the year to March more than doubled to £544,000, and momentum is growing with revenues of £440,000 recorded for the first six months of this financial year. Profits remain elusive, however, so investors will have to wait a little longer for that to change.
Midas verdict: Sulnox has come a long way this year and shareholders have been richly rewarded. Wealthy patrons believe there is more to come and intrepid investors may choose to follow their lead. Cautious types may prefer to bank some profit now and sell at least some of their stock while the going is good.
Traded on: Aquis Ticker: SNOX Contact: sulnoxgroup.com
Synectics
Synectics makes high-end security and surveillance kit for customers ranging from casinos to NHS hospitals.
The shares have almost doubled to £3.42 since Midas tipped them in February, and there is every chance of continued growth.
Chief executive Amanda Larnder revealed this month that profits would be well ahead of expectations – the group’s second profits upgrade this quarter. Next year looks promising too, with orders some 25 per cent higher than they were 12 months ago.
Record growth comes against a difficult backdrop. In August, then chief executive Paul Webb passed away suddenly, after 20 years with the firm.
Larnder, having been involved with Synectics for many years, most recently as finance director, was appointed to the top job last month.
Highly competent and ambitious for the business, she has stepped up to the plate and early signs are encouraging.
Orders are coming in thick and fast, the group is developing sophisticated AI tools to help customers spot risks and track anomalies and discussions are under way in new markets, such as renewable energy and data centres.
Following this month’s upgrade, brokers expect a 16 per cent increase in revenues to £57 million for 2024, with profits up more than 40 per cent to £4.3 million and a 50 per cent increase in the dividend to 4.5p.
Further strong growth is expected next year and beyond.
Midas verdict: Synectics’ kit is among the most sophisticated in the world, used by customers for whom security is paramount, including airports and prisons. The shares have delivered juicy gains but there should be more to come under Larnder’s stewardship. Hold.
Traded on: Aim Ticker: SNX Contact: synecticsglobal.com
Raspberry Pi
Newly floated companies have had a hard time in recent years, and many have slumped after joining the market. Not Raspberry Pi.
The affordable computer group floated in June at £2.80, and the shares rose sharply as soon as trading began. The stock has shot up to £5.16, soaring nearly 40 per cent in the past six weeks alone.
Founded in Cambridge just 12 years ago, Raspberry Pi has become known for computers that are robust, effective and cheap. Schools love them, tech geeks are fascinated by them and they make nifty gifts for children with a fondness for tinkering.
But the technology is ideal for many industrial sectors, too. Heathrow Airport’s screens use Raspberry Pi computers, train station ticket machines run on them and a growing number of manufacturers are adopting the kit instead of overpriced alternatives.
Only last month, chief executive Eben Upton unveiled a partnership with Italian tech specialist Seco, a move that should drive growth next year and beyond.
Brokers expect sales to increase 4 per cent this year, with stronger growth coming through in 2025 and 2026. Profits are forecast to dip slightly as Upton invests in the business, but the numbers should bounce back next year.
Raspberry Pi is tiny by comparison with American tech titans, but its brand is known the world over, offering cost-effective, reliable computers for home and business users alike.
Midas verdict: Raspberry Pi shares have had an enviable debut on the London market, making strides even before the recentsurge in price. Current levels seem unsustainable in the short term so investors may well choose to take some profits now at £5.16. Patient holders should bide their time, as Raspberry Pi could deliver serious long-term growth.
Traded on: Main market Ticker: RPI Contact: raspberrypi.com
Beeks financial
Beeks Financial helps stock exchanges, banks and other financial firms to save money and deliver better results to customers.
The company is also a pioneer in cloud-based technology specifically geared towards the financial services sector.
Recommended in spring at £1.73, the shares have risen almost 60 per cent to £2.75 and should continue to increase in value next year and beyond.
Based in Glasgow, Beeks was founded in 2011 by Gordon McArthur and he remains at the helm. Originally offering services to smaller brokers and investment funds, McArthur now works with some of the best-known names in the money world – and prospects are bright.
The Johannesburg stock exchange signed up to Beeks’ technology some two years ago, while McArthur is in advanced talks with several more exchanges and a string of major contracts are expected in the next 12 months, with US giant Nasdaq thought to be high on the list.
Brokers have great hopes for Beeks, expecting sales to increase almost 40 per cent to £40 million in the year to June 2025, with profits soaring more than 50 per cent to £6 million. Further increases are forecast for 2026 and beyond.
Signing up large stock exchanges and banks can take time, but once customers are on board they tend to stick around, taking more services from Beeks along the way.
Midas verdict: Beeks’ shares have risen more than 60 per cent since March to £2.84. They should increase in value, as talks turn into contracts. Investors should hang on in there.
Traded on: Aim Ticker: BKS Contact: beeksgroup.com
Serabi Gold
Gold has had an extraordinary year, flirting with record prices of $2,750 an ounce before settling to more than $2,600 – a 30 per cent increase since December 2023.
Brazil-based Serabi Gold has done even better, soaring almost 80 per cent to £1.23 in the past three months. Brokers believe it can go even further, as production increases, costs fall and exploration efforts yield results.
In 2022, Serabi produced 31,000 ounces of gold, but high costs and historic tax liabilities took the group into loss.
This year, production is expected to exceed 38,000 ounces, generating sales of more than $100 million (£78 million) and profits of $35 million (£27 million). By 2026 production could exceed 55,000 ounces, with even greater output expected in the longer term.
Sales and profit levels will depend on the gold price but many believe the outlook is benign, in a world where geopolitical tensions are rising and the inflation dragon could well rear its head again.
Midas verdict: Serabi Gold has come a long way in just a few weeks, so cautious investors should bank their winnings at £1.23 and head for pastures new. Gold-bugs may prefer to put their faith in longstanding chief executive Mike Hodgson and hold on to their stock.
Traded on: Aim Ticker: SRB Contact: serabigold.com
Dog of the year
This award goes to Agronomics, whose shares have slumped from 9.6p to 4p over the past 12 months.
The firm invests in businesses that are trying to produce food from cell cultures and micro-organisms, and it has suffered from growing disillusionment with fake meat and similar delicacies.
However, Agronomics focuses on an area known as precision fermentation, creating egg, milk and oil-type proteins in laboratories. Some products are already in use, including ‘cheese’ in German supermarkets, protein smoothies and even macaroons.
Midas verdict: Billionaire investor Jim Mellon chairs Agronomics and recently bought a million shares, taking his holding to almost 16 per cent. There are also high hopes for 2025, so some of this year’s losses may be reversed. At 4p, this stock has been a huge disappointment but now is not the time to sell.
Traded on: Aim Ticker: ANIC Contact: agronomics.im
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