Best AIM stocks to buy in September

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 September!

[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]

Alliance Pharma

What it does: Alliance Pharma is in the healthcare market, and deals with the acquisition, marketing, and distribution of pharmaceutical products.

By Alan Oscroft. There’s no risky biotech or pharma research here. Alliance Pharma (LSE: APH) is in the consumer products business, and gets most of its revenue from Europe, the Middle East and Africa.

And it looks like it’s been a profitable business.

The stock has been highly valued in the past. But we’re looking at a forward price-to-earnings (P/E) ratio of around 13 now.

And with strong earnings rises expected in the next couple of years, that should drop to only a little bit over eight by 2025. If the analysts have it right, that is.

There are dividends, too, with a forecast 4.1% yield this year, rising to 4.7% by 2025 on current forecasts.

There are risks with this AIM stock, though. Profits have been a bit erratic, and we don’t know how solid these forecasts for earnings and dividends might turn out.

But I do like this combination of growth prospects and progressive dividends.

Alan Oscroft has no position in Alliance Pharma.

Gateley Holdings

What it does: Gateley is a full-service law firm with offices across the UK and a strategic overseas base in Dubai.

By Charlie Carman. Gateley (LSE:GTLY) became the UK’s first publicly listed law firm after its AIM flotation in 2015. Since most firms in the legal industry are structured as LLPs, rather than companies, Gateley shares offer investors a rare chance to gain exposure to this lucrative sector.

The Gateley share price has been on a downward trajectory in 2023, but strong H1 results suggest the sell-off might not be justified. Revenue grew 22% to £76.1m, underlying pre-tax profit increased 13% to £9.6m, and the dividend was boosted from 3.0p to 3.3p per share.

Granted, uncertainties exist regarding how listed law firms should be valued, including Gateley. After all, only a few have taken the IPO route, and the collapse of Ince Group earlier this year rattled investors in the niche sector.

Nonetheless, the AIM stock’s finances appear to be in good health. This could be a classic opportunity to be greedy when others are fearful.

Charlie Carman has no position in Gateley Holdings. 

Volex

What it does: Volex is a manufacturing company that specialises in power products. It serves customers in the healthcare, data centre, consumer electronics, and electric vehicle (EV) industries.

By Edward Sheldon, CFA. Volex (LSE: VLX) shares strike me as a great investment right now.

For starters, the company is doing well on the back of its exposure to the data centre and electric vehicle industries (it just partnered with Tesla). For the year ended 2 April 2023, revenue was up 17.6% year on year to $722.8m. Meanwhile, the company said that it was seeing high levels of customer demand in the current financial year.

Secondly, the stock is relatively cheap. At present, the forward-looking price-to-earnings (P/E) ratio here is about 13. I see that as quite low given the company’s level of growth. It’s worth noting that analysts at HSBC have a 510p price target for Volex, which is well above the current share price.

Finally, after a big pullback, the stock is now rising again. So, there’s positive share price momentum here.

Now, this AIM stock can be quite volatile at times. This is a risk to consider. However, I like the overall risk/reward setup. Taking a long-term view, I see a lot of potential.

Edward Sheldon owns shares in Volex.