Stock picks: Smart Metering Systems, Advanced Oncotherapy and Midwich Group

We talk to Alan Green from PIR Multichannel about three small-cap stocks he’s watching – Smart Metering Systems (SMS), Advanced Oncotherapy (AVO) and Midwich Group (MIDW).

Smart Metering Systems (SMS)

As a provider of smart utility-metering systems, SMS sits in an industry that many believe could be about to see major growth. And its share price chart certainly reflects that – rising over 134% from October 2015 to October 2017.

Not only that, but its fundamentals have been strong as well. Every time SMS has released results, its earnings, revenues, dividend, as well as its earnings before interest, tax, depreciation and amortization (EBITDA), have grown. In its last earnings announcement, the dividend was raised 27%.

With such strong growth, choosing the right time to buy SMS is key, so look at resistance levels on its 200-day moving average. From there, you could be looking at an upside of 10-15%.

At the time of interview, Alan does not have any stake or professional interest in Smart Metering Systems.

Advanced Oncotherapy (AVO)

Advanced Oncotherapy is developing a revolutionary proton beam therapy machine to treat cancerous tumours. Development is taking place at a subsidiary called Application of Detectors and Accelerators to Medicine (ADAM), which works out of the European Organisation for Nuclear Research (Conseil Européen pour la Recherche Nucléaire or CERN) and uses Large Hadron Collider technology in AVO’s proton therapy systems.

AVO expect to be treating superficial tumours by autumn 2018. They’re also building a treatment centre at Harley Street, which they expect to open in March 2019.

Its technology may be impressive, but AVO’s recent share price history has been problematic – the company dropped from 110p down to below 20p from October 2016 to July 2017. The reasons for this fall have been well publicised, with funding issues at the start of the year causing concern.

With a modest recovery above 30p, though, AVO’s troubles could be behind it. And as the company nears the delivery date for its machines, it might be set for a return to 2016 levels.

Alan holds AVO stock and represents them with PIR Multichannel.

Midwich Group (MIDW)

Alternative Invested Market-listed (AIM) and with a market cap of around £370 million, Midwich Group has had a stellar 2017, offering few pullbacks for potential buying opportunities. Its share price grew nearly 115% in the 12 months to October 2017, and like Smart Metering Systems it has recently increased its dividend – this time by 36%.

Unlike SMS and AVO, MIDW isn’t developing exciting new tech. Instead, it supplies audio-visual, video, film, broadcast and lighting equipment to around 10,000 clients worldwide. But it’s a mid-size company that could be going places, and given recent growth its share price could go above £6.00 by 2018.

Resistance could again provide an opportunity to buy Midwich Group – if it ever does pull back – and around 400p could be the right area.

Alan does not have any stake or professional interest in Midwich Group.

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