Biggest AIM Winners Of 2014: Leni Gas & Oil PLC, Egdon Resources Plc and GW Pharmaceuticals plc

Leni Gas & Oil PLC (LON: LGO), Egdon Resources Plc (LON: EDR) and GW Pharmaceuticals plc (LON: GWP) are among 2014’s biggest risers so far.

Mark Stones

Mark Stones (TMFMumbojumbones) joined The Motley Fool in 2014 and initially worked as a writer for Fool.co.uk, before joining the Fool’s analyst programme. Mark earned a BA in English from Loughborough University. Although he spends more time reading annual reports than Russian literature these days, he still appreciates a novelist’s antipathy toward the accepted view, which is a useful attitude when trying to sniff out hidden gems on the stock market. His approach to investing has been largely influenced by the principles of Warren Buffett and Peter Lynch. He also takes a special interest in the work of healthcare companies. Outside of investing, Mark plays guitar, enjoys good writing and has a guilty passion for combat sports.

Published 18 July, 2014 3:45 pm BST

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

There are over 1,000 companies traded on the Alternative Investment Market (AIM) with a collective market cap of around £70bn. Relative to the FTSE All Share, AIM stocks have underperformed, returning 50% over the last five years (compared with the Footsie’s 70%).

A typical AIM investment will be in a growing business, yet to reach its full potential. This is riskier, say, than investing in an established blue-chip stock, but your returns could be far higher.

ASOS, the online fashion retailer, is one of the most famous success stories since AIM’s debut in 1995. ASOS was initially priced at 3p and soared as high as £70 (now £30 — after a major swing in value).

Since last year investors have been able to put AIM shares in their ISA after the government decided to encourage investment in growing businesses; a further incentive arrived when stamp duty was removed from AIM stocks in April.

But never mind these perks, it’s still equally as imperative to find a company with a strong balance sheet that you trust will allocate capital well.

There are the three of the best performing AIM shares of the half-year (source: Capital IQ):

Leni Gas & Oil

Shares in Leni Gas & Oil (LSE: LGO) have surged this year on continued drilling success in Trinidad. Well GY-666, the third of 30 planned new wells at the Goudron Field, has been successfully drilled to a total depth of 3,357 feet, and following a review of the electric logs LGO estimates the presence of at least 394 feet of net oil play. Production at GY-664, the first well of the programme, delivered up to 326 barrels of oil per day from the Gros Morne formation, which was three times the volume of analyst forecasts.

Egdon Resources

Many a retail investor has high hopes for a shale gas boom in Britain. The gains could be immense, but look at how Poland’s shale gas sector collapsed to get a sense of the dangers. Shale gas explorer Egdon Resources (LSE: EDR) has seen its share price soar 178% in 2014, after signing a deal with France’s Total to fund drilling in exchange for assets. Egdon’s shale gas acreage in the UK is 140,000 acres.

GW Pharmaceuticals

GW’s (LSE: GWP) shares are up 150% since January, continuing an impressive rally that began back at the beginning of 2013. Revenue is generated from sales of Sativex, a cannabinoid drug used to treat multiple sclerosis spasticity. The company is nearing the end of Phase 3 cancer pain trials for Sativex, which has received Fast Track designation by the US regulator to help get patients faster access to the treatment.