ShareSoc Launches AIM Company Rating System

PRESS RELEASE 41 (26/11/2012)

ShareSoc has been concerned for some time with the quality of companies on AIM. Private investors often get sucked into investing in companies with poor corporate governance, poor basic infrastructure, no track record, and with incompetent or untrustworthy directors. New AIM IPOs are particularly problematic with companies frequently failing or subsequently delisting. But how can investors sort the wheat from the chaff?

ShareSoc has devised a simple tool to help investors differentiate between good companies and those that are more questionable. It is a check list of 47 questions of readily available information and aims to summarise in a single score various aspects of how shareholder friendly the company is, the corporate governance, director remuneration policies, legal and regulatory problems and other aspects that investors might need to examine.

But it is not a black and white rating system – it only provides a relative quality score and no AIM company is likely to tick all the boxes. It’s the boxes that are not ticked that the investor needs to consider and judge whether that is of concern (although ShareSoc suggests that the items being scored are all important).

ShareSoc Chairman Roger Lawson had this to say about the new system: “No doubt we will be criticised for introducing the ultimate ‘box ticking’ corporate rating system, but investors in the AIM market urgently need a simple tool to help them focus on the quality of companies. We hope that promotion of this standard will help to improve the choices that AIM company directors and their promoters, brokers and Nomads decide to make. We have covered the problems in AIM companies in our past newsletters and met with staff of the LSE on the subject, but with no positive results as yet. Although some AIM companies have been enormously profitable for investors, many have not. If reform cannot be achieved by regulation and better corporate governance standards, then investors have to try and persuade companies more directly or avoid the ones that are likely to disappoint in due course.”

More Information

Note that the system is not designed to give buy or sell recommendations on companies and is not a substitute for full financial analysis and other due diligence that investors should perform before they invest in a company. But it’s interesting to mention the scores that resulted when we rated two companies which ShareSoc has commented on in the past. These are Intercede (which ShareSoc has criticised for its pay arrangements, lack of a Non-Executive Chairman and shortage of independent Non-Executive directors) and Lo-Q which is a popular AIM company among private investors. Intercede scored positive ticks on 53% of questions and Lo-Q scored 85% – clearly a major differentiation. Note that we will not be disclosing the details of the scoring because some of the answers are subjective and may vary over time – this is not a recommendation to buy or sell the shares in those companies.

The rating system is available to anyone on the ShareSoc web site here: www.sharesoc.org/scorecard.html ) so you can rate any company in about 30 minutes yourself. We welcome feedback on the new system, and ShareSoc may use it when reviewing AIM companies in future. Other organisations who report on AIM companies are also welcome to use it so long as they give an acknowledgement of the source.

For further information, please contact:

Roger W. Lawson,
Chairman,
ShareSoc Telephone: 020-8467-2686
Email: info@sharesoc.org

Note any members of the press who wish to receive a complimentary copy of our informative monthly newsletter should send a request to info@sharesoc.org . Our newsletters cover not just the affairs of our organisation but contain general financial news and commentary. An example of our past newsletters is available on our web site. You can also follow ShareSoc on Twitter from @ShareSocUK.

About the UK Individual Shareholders Society (ShareSoc)

ShareSoc represents and supports individual investors who invest in the UK stock markets (and who own as much as 30% of the shares in UK public companies in aggregate). We are a mutual association controlled by our members with “not-for-profit” articles and incorporated as a company limited by guarantee. The organisation is financed by member subscriptions, donations from supporters and by the services it provides to members. Associate Membership of ShareSoc is free and is open to everyone with an interest in stock market investment. More information on ShareSoc can be obtained from our web site at www.sharesoc.org .

Post Date: November 26, 2012

Group description:	SIGnet Taunton is a new group with around 10 keen members at present, with a range of investment styles and experience. We welcome new members.
Meeting Type/Venue:	In person meetings at a golf club near to the centre of Taunton.
Meeting Frequency/Timing:	We meet on the first Monday of every month at a golf club near to the centre of Taunton, 11am until 3pm with a lunch break.

Group description:	An online group for those who are new to investing, or have only been investing for a few years. Including topics such as: – What is a share or a bond, why and how to buy them. – Comparing funds, unit trusts, Investment trusts and exchange traded funds. – Portfolio management and diversification. – ISAs, pensions, SIPPS and how to save tax. – How terms such as PE ratio and dividend yield are used to value a share. – How to use technical analysis or charting.
Meeting Type/Venue:	Online using Zoom.
Meeting Frequency/Timing:	Meetings are usually held on the last Monday of the month at 7:00pm.

Group description:	An online group for those who already have some experience in investing. Covering topics such as finding companies to invest in, financial statements and ratios, valuation / margin of safety, analysis of companies and investment trusts and exchange traded funds.
Meeting Type/Venue:	Online using Zoom.
Meeting Frequency/Timing:	Meetings are usually held on the last Wednesday of the month at 7:00pm.

Group description:	The Equity Income Group welcomes investors of all levels of experience, from beginners to advanced. The focus of meetings is on dividend paying Investment Trusts, though there is also discussion around individual shares.
Meeting Type/Venue:	Meetings are held online.
Meeting Frequency/Timing:	Meetings are held every 6 weeks on a weekday between 7 and 8:30pm.

Group description:	The Group welcomes investors of all levels of experience, from beginners to advanced. The focus of meetings is on all types of income generating financial instruments, from stocks through Trusts and Funds and ETFs to retail bonds. Meetings involve presentations from members, who are also expected to lead discussions from time to time, as well as discussions on what has been bought and sold since the last meeting.
Meeting Type/Venue:	Meetings are in-person in a venue in Central London.
Meeting Frequency/Timing:	Meetings are usually held on the last Thursday of every other month, starting with an informal lunch around 1pm followed by discussions until around 5pm.

Group description:	A welcoming group open to all types of investors. Typical meeting content is to have a deep dive presentation on a topic selected by the participants and a session on buy/ sell/ key lessons learnt last month.
Meeting Type/Venue:	In person at a friendly pub close to Piccadilly Circus
Meeting Frequency/Timing:	Monthly during the evening on the first Wednesday of the month.

Group description:	All levels of experience welcome. A typical meeting agenda includes: – Macro Environment – Trades: Members review existing positions and identify securities with promising TA entry patterns or setups and with suitable risk/reward. Any security, long, short, futures, options may be considered. The convener takes actual positions in trades and maintains his own detailed ledger, accurately measuring performance of individual securities and cumulative activity. Members are notified by e-mail prior to the entries or exits that are decided upon. Following each meeting an updated copy of the ledger is circulated together with the next meeting agenda. Members may wish to maintain similar ledgers of their own but there is no obligation to do so. – Technical Analysis: Techniques and systems used in trades. Members can request discussion of particular aspects of TA.
Meeting Type/Venue:	Online via Zoom
Meeting Frequency/Timing:	The first Tuesday of every month from 7 to 9pm

Group description:	Group focused on active investing, primarily in small / medium cap UK equities.
Meeting Type/Venue:	Regular Zoom meetings interspersed with occasional face to face meetings and social activities in the North West.
Meeting Frequency/Timing:	Monthly on Saturdays at 10am.

Group description:	Our group covers a wide spectrum of mainly stock market investing and trading from equities – which include shares, ETF’s Investment and Unit Trusts. We normally rotate the meeting chairperson (responsible for creating, with member’s help, suitable agendas) and a meeting presenter (members take it in turns to provide a 15 to 45 minute presentation on a subject of their choice). Various investing topics of interest are regularly discussed such as software, brokers, investing categories and markets and any related topics of interest.
Meeting Type/Venue:	Meetings will be returning to in-person in a private room at a West London golf club, close to an underground station. In the meantime monthly video calls and an in-between meeting email group will continue.
Meeting Frequency/Timing:	In-person meetings will be held on the second Wednesday of each month in the afternoons, following a golf club one course lunch.

ShareSoc Launches AIM Company Rating System

PRESS RELEASE 41 (26/11/2012)

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