There were some mind-boggling gains made by AIM stocks in 2020.
When a stock rises by more than 1,000% and can’t even make the top five gainers, then you know it has been an extraordinary year in which it was possible to make a lot of money.
Unfortunately, if you were asleep at the wheel and held the wrong stocks, you could have lost your shirt.
The s**t or bust nature of AIM has always been part of the appeal of AIM or a major reason to avoid it – depending on your risk appetite.
It’s an ill wind that blows nobody any good
2020 was, of course, a year characterised by the ultra-scary coronavirus (COVID-19) pandemic but in any crisis, there always seem to be some who do well.
Step forward the stock market star of stars this year, Novacyt SA (LON:NCYT), the infectious disease diagnostics specialist.
The shares rose 5,970% in 2020 as the company released a succession of announcements detailing how its technology could detect COVID-19 cases.
In April alone, the shares rose from 1.75p to 4.21p after the company was provided emergency authorisation by the US Food and Drug Administration to deploy its coronavirus test, just when the outbreak was accelerating in several western countries.
The shares peaked at 12p in late October as the coronavirus diagnostics field started to get a little crowded. The welcome news about the development of COVID-19 vaccines also took some of the shine off the shares, which ebbed to 8.5p but there will still clearly be a need for a good diagnostic test for some time yet – maybe forever.
Synairgen PLC (LON:SNG), up 2.370%, was the third-best AIM performer of the year and another stock benefiting from having a product that could contribute to the fight against the pandemic. In Synairgen’s case, the product was SNG001, an inhaled formulation of interferon beta, that tackles the severe symptoms of coronavirus.
The success stories were not all health-related, however. EQTEC PLC (LON:EQTEC) and Powerhouse Energy Group PLC (LON:PHE), two renewable energy specialists, had fantastic years; the former was up 854% and the latter up 1,230%.
While it was a torrid year for the fossil fuel-based energy firms, there was a feeling that renewable energy companies’ time has come, as governments look to funnel investment into infrastructure projects to reflate their economies while at the same time work towards hitting zero-carbon targets.
As good as gold
The end of year review always seems to have a few major success stories from the mining sector and this year was no exception.
Greatland Gold PLC (LON:GGP) soared 1,940%, dragging Starvest PLC (LON:SVE) along with it; the latter has a 2.2% stake in Greatland and has been basking in the reflected glow of Greatland’s successful drilling results at the Havieron deposit in the Paterson region of Western Australia.
Investors in sector peer Wishbone Gold PLC (LON:WSBN) are unlikely to grumble at 795% increase, even if it was only good enough for eighth place in the AIM top 10 this year.
The Wishbone share price really started motoring in October after it acquired an option in October on mineral exploration tenements in the Havieron and Telfer region of Western Australia.
It pulled the trigger on the acquisition in November after it identified four magnetic targets of considerable size. Significantly, these targets are much shallower than the Havieron discovery, with the top of the magnetic targets ranging from 150m to 250m below surface, Wishbone said.
Down in the deepest depths of AIM’s cellar
Not all small-cap mining investors made it big; the share price of Tri-Star Resources PLC (LON:TSTR) collapsed as the company cancelled its listing on AIM; the shares were down 95% lower in 2020.
It was also a grim year for another Hurricane Energy PLC (LON:HUR), described as “the flailing oil field developer” by Proactive’s oil & gas correspondent, Jamie Ashcroft.
The company will soon open talks with bondholders and other stakeholders over a possible restructuring and new funding. The shares plunged on the news, adding to the year’s losses that had stretched to 92% by Christmas Eve.
Zibao Metals Recycling Holdings went on the scrap-heap in March, throwing in the towel after China made various announcements banning the importation of 32 types of scrap materials including plastic waste and unsorted waste paper.
The company sold its Masterpiece Enterprises subsidiary, leaving it as a cash shell under the new name Phimedix PLC (LON:PHM).
It failed to make an acquisition within six months of becoming a cash shell and under AIM’s rules, its listing was suspended in September, leaving it another six months in which to make an acquisition otherwise its listing will be cancelled.
Shareholders headed for the exits, leaving the shares down 95%.
The only consolation for shareholders who held on to these turkeys is that hope springs eternal for AIM stocks … well, maybe not for Tri-Star, nor Phimedix unless it gets its skates on. I can’t be sure but it would not surprise me to learn that some of this year’s star performers have featured in previous reviews of the big movers of the year, only featuring at the wrong end of the table.