We asked our freelance writers to share their top ideas for stocks listed on the Alternative Investment Market (AIM) to buy with investors — here’s what they said for August!
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Jet2
What it does: Jet2 is a British low-cost leisure airline and travel operator.
By John Choong. Despite declining 10% since it reported a stellar set of full-year results, Jet2 (LSE:JET2) remains a top FTSE AIM stock for investors to consider buying. The travel operator tripled revenue to £5.03bn and returned to profitability, and even restored its dividend. These are clear signs of a resilient business as the leisure airline continues to outpace its pre-pandemic levels.
What’s more, load factor is up to 90% and seat capacity has expanded by a whopping 156%. As such, Jet2 is rapidly growing as the UK’s top tour operator. The current dip in its share price presents a buying opportunity too, given its discounted multiples.
There are concerns over the founder’s retirement. However, these look to be overblown given the board’s confidence for the future. Macroeconomic headwinds do present a challenge, along with increasingly hot competition from easyJet. But given that the stock has a suggested upside of 60% while the travel sector remains resilient, Jet2 shares are simply too cheap for me to ignore.
| Metrics | Jet2 | Industry Average |
| P/B ratio | 2.5 | 2.4 |
| P/S ratio | 0.5 | 0.8 |
| P/E ratio | 8.8 | 12.7 |
| FP/S ratio | 0.4 | 0.6 |
| FP/E ratio | 7.6 | 9.3 |
John Choong has no position in any of the shares mentioned.
Kitwave
What it does: Kitwave supplies and delivers wholesale frozen, chilled, fresh, alcohol, grocery and impulse products to retailers.
By Kevin Godbold. Kitwave (LSE:KITW) has grown from being a regional wholesaler to one with a network covering the whole of the UK. And that size likely provides a competitive advantage.
The business delivers to independent convenience retailers, leisure outlets, vending machine operators, foodservice providers, other wholesalers, and leading national retailers.
And I’m keen on businesses that are once-removed from the end customer. They can benefit from final customer demand without becoming caught up in challenges retailers might face at the sharp end.
However, there are some potential risks with this stock. For example, a fair bit of director selling occurred in July 2023. And projections show little growth in earnings in 2024.
Nevertheless, the company posted a robust half-year results report in July. And the valuation looks undemanding.
With the share price near 319p, the forward-looking earnings multiple is just above 11 for 2024. And the anticipated dividend yield is almost 4%.
Kevin Godbold does not own shares in Kitwave.
YouGov
What it does: YouGov is an international research and data analytics group. Its customers range from government bodies to top global brands.
By G A Chester. YouGov (LSE: YOU) stock has a terrific growth record since listing on AIM in 2005. It’s grown from a pioneering UK pollster into an international research and data analytics group.
Growth is expected to continue as it begins its latest three-year strategic plan. It’s targeting revenue of £500m, compared with current trailing 12-month revenue of £251m. And an operating profit margin of 25%, compared with a current 18%.
Furthermore, these growth prospects have just been boosted by the company’s announcement of a €315m acquisition. The business it’s acquiring generated revenue of £120m last year and a pre-tax profit of £21m. Given YouGov’s current revenue of £251m and pre-tax profit of £46m, this is a substantial acquisition, rather than a small bolt-on buy.
There’s a risk the acquisition may not deliver the strategic and financial benefits management envisages. Nevertheless, I think the risk is more than offset by the potential high rewards of success.
G A Chester does not own shares in YouGov.
