Here are three I believe are worthy of investment this month.

Team 17

A market darling during the pandemic, indie video game developer Team 17 (LSE: TM17) is now very much unloved. The AIM stock’s share price has halved in 2022 to date. Personally, I see this as an opportunity.

Back in March, the company announced record results. Following the release of 12 new games in 2021, revenue rose 9% to £90.5m. Pre-tax profit was up 11% to £29.1m.

A risk with any developer is that what they produce has no guarantee of proving popular. Moreover, the rise in the cost-of-living combined with wage inflation is expected to increase costs this year by roughly £1.7m. Revenues are also expected to be hit by around £4m due to the Ukraine/Russia war.

However, the balance sheet looks strong and a number of recent acquisitions are expected to be “immediately earnings accretive” in 2022.

At 17 times forecast earnings, I think Team17 looks a great buy.

SDI

Scientific and tech product producer SDI (LSE: SDI) is an AIM stock I’ve had on my watchlist for some time now. The reason I haven’t been buying is that the valuation has always looked full. However, the company is now getting much closer to entering my ‘buy zone’.

Sure, it’s still not cheap. The shares currently change hands for 19 times earnings. So there’s a chance we might not have seen the bottom yet if economic fears worsen. There’s also no dividend stream to compensate me while I await a recovery.

Full-year numbers are due on 18 July. Based on its most recent trading update, I think these should be pretty stellar. A couple of months ago, SDI said revenues and profits were expected to “materially exceed current market expectations“. Not many businesses are saying that right now!

Consequently, I’d be comfortable buying now.

Strix

A final AIM stock I think is worthy of investment in Juy is one I already own: kettle safety control supplier Strix (LSE: KETL). This is despite seeing all my paper profits evaporate in 2022. The shares are down almost 45% this year.

Still, the fact that I’m a long-term investor means my glass is always half-full. Having arguably got a little frothy last year, the company’s valuation has now returned to a more reasonable level. Shares now trade at 11 times forecast earnings and come with a 5.2% dividend yield.

In May, Strix announced it was “maintaining expectations for the full year“, based on trading in 2022 so far. Product price increases across its entire range have been “successfully implemented” in the face of higher inflation. And manufacturing operations in China have not been severely impacted by the resurgence of Covid-19. That doesn’t exactly sound like a company in crisis to me.

I’m very tempted to top up at this level.

Strix

Kettle safety control manufacturer Strix (LSE: KETL) is a stock I’ve held for a few years now. Although not the sort of company to get the pulse racing, it has a huge share of a niche market.

Unfortunately, Strix is also an example of how far small-cap stocks can tumble when investors get scared. Having steadily climbed in value since listing in 2017, shares have given back a lot of their gains over the last nine months.

Am I bothered? Not really, especially as the company has already shown itself to be a consistent dividend hiker. Right now, the shares yield a forecast 4.6%. That’s clearly not enough to beat inflation, but it will help take the sting out. Despite the risks involved in buying shares, it’s also a far better return than I’d get from a cash savings account right now.

The resurgence of Covid-19 in China could cause more supply chain disruption for Strix. But with current trading meeting expectations, I think a lot of this is already priced in.

I’d happily buy more today.

Central Asia Metals

Copper miner Central Asia Metals (LSE: CAML) is another dividend share I’d be comfortable buying. The business is based in Kazakhstan and also has a lead, zinc and silver operation in Macedonia.

Naturally, the share price of any resource play is likely to be volatile and CAML is no exception. The stock has jumped all over the place year-to-date and I suspect will continue to do so, especially if the conflict in Eastern Europe drags on.

As far as income is concerned however, this stock looks like a winner. Based on analyst projections, the shares currently yield an inflation-battling 7.2%. The payouts should be covered well over twice by profit too.

Considering the potentially huge demand for copper in the years ahead (due to the green energy revolution), this dividend share also looks cheap at less than six times forecast earnings.

Premier Asset Management

Asset managers have been hit hard by people moving their money out of the markets. Premier Asset Management (LSE: PMI) is just one example. The company’s share price has dropped by over a third in 2022 even though it’s up over 10% in a year.

Even management believes there could be more to come. In last week’s half-year results, CEO Mike O’Shea said the outlook for investment markets “remains uncertain.”

On a more positive note, Premier also reported a 60% rise in pre-tax profit in the six months to the end of March. That should mean that dividends are safe for now. Speaking of which, the interim payout was kept steady at 3.7p per share. If it does the same with the final payout, the shares currently yield a massive 8.1%!

Of course, Premier is just one option for investors in a very competitive space. A risk here is that it may need to lower its fees in an effort to remain competitive.

Then again, this might not be necessary. No less than 90% of its funds have outperformed the median return over three years.

1: Once it’s gone, it’s gone

Note to self: the £20,000 annual ISA allowance doesn’t carry over. In other words, I won’t be able to put £40,000 in during the next tax year if I decide not to make any contributions in the 2021/21 tax year. As such, I’ll be cramming as much cash into this account as possible before 5 April.

Clearly, there’s no obligation to actually invest this money before the ISA deadline. However, with markets in a funk for a variety of reasons, I think putting my money to work sooner rather than later will really pay off.

2: What’s boring/unknown can be profitable

Just because the deadline is approaching does not mean I should buy what’s flavour of the month. In fact, many of my better buys have been those that rarely attract fanfare. To be brutally honest, some of them are rather boring. Examples include laser equipment manufacturer Somero Enterprises and kettle safety control supplier Strix. Sexy? No. Profitable? Oh yes!

Both of the above also return dividends to their owners that I always reinvest back into the market, allowing me to take greater advantage of compound interest.

3: Know what I can control

I used to curse the market for daring to go against my wishes. My Foolish training taught me to react differently.

The fact is, the market simply doesn’t care what I think. Nor do the shares I own know that I own them. This might seem obvious but it’s very easy to become too attached to an outcome rather than striving to improve the process of stock selection. While the latter still can’t guarantee success, how I choose stocks definitely is within my control!

What’s far more important to me is owning slices of quality companies – just like star UK fund manager Terry Smith. Thankfully, there’s no shortage of good businesses out there, unlike the number of days left before the ISA deadline elapses.

4: Time matters more than timing

Like most investors, I’d love to be able to predict exactly where markets (or the share prices of individual stocks) will go next. Knowing I can’t ever do this, at least consistently, is actually one of the most important learning points for me over the years. It also makes a huge difference to how I assess the performance of my Stocks and Shares ISA.

This is why I never ruminate over my timing or how my account is doing from annual deadline to annual deadline. Whether I buy stocks before or after 5 April, the only number that truly matters is the one showing when I close the account for good.

5: Learn to walk away

Cards firmly on the table: I used to be a compulsive portfolio-checker. Thankfully, I’ve realised that this habit doesn’t serve me in any way. Rather, it increases the risk that I’ll do something impulsive/stupid.

Understanding when to close the laptop and physically step away from the market, while remaining invested, is fundamental. This is especially the case when operating an ISA since any money I withdraw but then reinvest will count towards that £20,000 allowance.

Multi-bagging growth stock

With a market cap of £1.4bn, international research and data analystics firm YouGov (LSE: YOU) isn’t exactly the market’s best-kept secret. However, nor is it a company that frequently hits the headlines. As a long-term Foolish investor, that piques my interest, especially when looking at the performance of the shares. 

In the last five years, YouGov’s valuation has jumped almost 400%! This goes some way to explaining why I have a good proportion of my money invested lower down the market spectrum. Picked carefully, the potential upside is greater since it’s theoretically easier for relative minnows — like YouGov once was — to grow revenue and profits at a faster clip. Indeed, it’s why I’ve been buying this investment trust in February.

Momentum reverses

Like many growth stocks, however, YouGov hasn’t fared so well in 2022, dropping 20%. That’s perhaps to be expected given recent global events and the stock’s still-eye-watering valuation of 47 times forecast earnings. To pay this price, I’d expect the company to be blowing analyst projections out of the water. However, management recently stated that growth would likely be only “slightly ahead” of its own forecasts. That’s hardly a bad thing but it’s clearly not been enough for some investors to stick around.

All this brings to light a key risk with buying high-performing investments; the bar for what is considered successful trading is set so much higher. Since no company is capable of executing perfectly, the potential to disappoint is greater.

Interim results from YouGov are due on 22 March. If the share price drops further, I might have to consider adding the stock to my own portfolio. In spite of the high valuation, this looks to be a very decent company with great geographical diversification and a robust sales pipeline. It’s also worth pointing out that YouGov has consistently hiked its annual dividend by double digits for many years now. That’s never a bad sign. 

Off the boil

Kettle safety device-maker Strix (LSE: KETL) is another under-the-radar, AIM-listed stock that’s done well for early holders such as myself. Between March 2020 and September last year, the share price increased roughly 185%! No doubt some investors had become aware, like me, of the fat margins and seriously high returns on capital this company consistently achieves.

Unfortunately, recent performance hasn’t been so great, with shares falling 35% in the last six months. Like so many other businesses, Strix has faced supply chain issues and higher freight costs. Today’s news of a “cyber incident of Russian origin” won’t exactly boost sentiment either. That said, the company has already stated that there’s been “no impact on customer orders or sales“.

Speaking of which, the £500m cap business recently said that it would log revenue growth of around 30% for 2021. Pre-tax profit has also been in line with market expectations. Numbers will be officially confirmed on 30 March.

With the shares now trading at 15 times earnings and a new factory in China effectively doubling manufacturing capacity, I may well increase my stake in the near future.

Powering up my portfolio

The video games market is tipped to double in size between 2020 and the end of the decade. It’s the sort of industry growth that as an investor I find hard to ignore. It’s also a trend I’m considering exploiting by buying shares in developer Team17 Group (LSE: TM17). I already own shares in software development services provider Keywords Studios, incidentally.

Team17 is the brains behind many popular titles including Overcooked! and The Escapists. It has been taking steps to pump up its product pipeline and in 2020 it launched a record 10 brand-spanking-new games. I actually believe Team17 could become a takeover target as consolidation in the games industry takes off. Take-Two Interactive has just sealed a $12.7bn deal for FarmVille creator Zynga to bolster its games portfolio.

I am concerned by Team17’s high valuation, however. The tech stock currently trades on a forward price-to-earnings ratio of 42.7 times. Such a reading could prompt a sharp share price drop if earnings forecasts start to look fragile. For example in the event that a title receives a poor critical reception that subsequently smacks sales.

Team17’s share price has struggled for momentum more recently. Over the past year it’s actually fallen 12% in value. However, as a long-term investor I think this drop could be an attractive investment opportunity.

Heating up nicely

Manufacturers in the UK face a significant threat to earnings as supply-side problems mount. Kettle safety control manufacturer Strix Group (LSE: KETL) has warned in recent months that supply chain disruption and soaring raw material costs remain dangers for its business.

This threatens to be a lasting problem too following Britain’s exit from the EU. Two-thirds of UK manufacturers have seen their businesses affected by Brexit red tape, according to a new survey. Some 56% of respondents expected these problems to worsen in 2022 too as new customs checks come into force and new product labelling rules begin.

The question is whether these obstacles are enough to discourage me to invest in a particular UK share. In the case of Strix Group I believe the profits outlook is bright despite these supply-side problems.  Sales at the business soared 58% in the first six months of 2021, latest data shows. This was thanks to solid organic growth as well as the acquisition of water filtration specialist LAICA in 2020.

The business aims to double turnover over a five-year period and recently opened a new manufacturing facility in China to help it achieve this goals. The company has risen almost 30% in value over the past 12 months but at 290p is down considerably from August’s record highs above 380p. I reckon this provides me with an excellent dip buying opportunity.

Strix

As I type, shares in kettle safety device manufacturer Strix (LSE: KETL) are up 70% over the last year. That’s a superb return for what is, admittedly, not the most exciting of businesses. In fact, KETL has been a winning AIM stock since coming to the market. In four years, the shares are up 173%.

This momentum might just continue. In July, the company said it was now expecting to deliver revenue growth of 50% or so for the first half of 2021, and roughly 30% for the year as a whole. Any improvement to the latter when interim numbers are confirmed in September should do the share price no harm.

I’m not the only one bullish on Strix either. Earlier this month, analysts at Liberum said the company was primed for a re-rating, due to the potential earnings growth on offer. 

Of course, there’s a chance the shares could lose steam at some point. Early holders may want to bank some profit, for example. Even so, a valuation of 24 times forecast earnings still doesn’t feel unreasonable. The solid dividend stream compensates me for choppier times too.

Inspecs

Eyewear manufacturer and distributor Inspecs (LSE: SPEC) is another AIM stock I’d buy now. Its shares are up 51% in value over the last year. In its 18 months as a listed company, SPEC has returned 86%.

All this is rather impressive considering Inspecs came to market at the worst possible time. Due to Covid, group revenue fell almost 25% to $47.4m in 2020. The firm also reported a post-tax loss of $8.9m. 

Still, next month’s interim figures should be more encouraging. Inspecs has certainly been preparing itself for better times by snapping up lens maker Norville and manufacturer Eschenback. It’s also been adding new global brand licences to its portfolio. 

Yes, a P/E of 30 is getting punchy and shares are less liquid than those of other companies (meaning price moves could be more pronounced). However, I think the ‘essential’ nature of its products makes up for this risk.

Mortgage Advice Bureau

A final AIM stock worth buying in advance of September is Mortgage Advice Bureau (LSE: MAB1). As one might expect, trading has been excellent of late, thanks to a booming UK housing market. However, shares now trade on 39 times earnings, having climbed 123% in value in 12 months. Is this too high?

It’s certainly not cheap. Then again, recent demand for housing (and, by association, MAB’s services) surely won’t grind to a halt. More people are wanting to work from home, after all. Moreover, I’d be shocked if next month’s interim results were anything but great. 

As a (mostly) buy-and-hold investor, I also think it’s important not to base an investment decision purely on a single metric. Expensive stocks can continue going up if they can carry on growing. As an aside, returns on capital are high and the firm has net cash on its balance sheet — just the sort of things I look for.

MAB’s still a buy for me.

Hot UK share

Today’s full-year results from kettle safety control supplier Strix (LSE: KETL) go some way to reminding me why I’m already invested in this wonderfully ‘boring’ company.

While revenue fell 1.6% to £95.3m over 2020, this was “significantly ahead” of what Strix believed might happen because of Covid-19. This was due to a “marked recovery” in the second half of the year.

Moving to the bottom line, pre-tax profit climbed 2.4% to £30.9m. Although a 41.2% rise in net debt (to £37.2m) would usually cause me concern, the reasons for this increase look sound. Over 2020, Strix acquired water filter firm LAICA and spent money on its manufacturing operations in China.

Comments on Strix’s outlook were also encouraging. Today, CEO Mark Bartlett reflected that the “much-improved performance” in the second half of last year had carried on into this year. A strong order book for kettle safety controls and the launch of new products suggests the Isle of Man-based business will enjoy a better 2021.

Ironically, my one concern with this UK share is that its share price has more than doubled over the past year. This leaves it trading on a valuation of 17 times forecast earnings. That’s not excessive. But it’s vastly different from the single-digit P/E valuation the AIM-listed company had when I first began investing in it.

I do wonder if we might see a wave of profit-taking over the next few weeks and months. This could be compounded by the trend for investors to move away from defensive stocks (which Strix arguably is) and into battered travel and leisure shares.

As such, I’m inclined to add to my holding gradually over the next few months. 

Lockdown winner

Another stock I’d feel comfortable spending some of my ISA allowance on is Harry Potter publisher Bloomsbury (LSE: BMY).

In another positive trading update, the UK small-cap announced profit for the year to the end of February will now be “significantly ahead” of the £14.8m expected by the market. This follows an “exceptional sales performance” last month as millions of us sought to pass the time by reading. In addition, Bloomsbury also saw an increase in demand for remote access to learning materials by academic institutions. 

As great as this is, the shares aren’t devoid of risk. Even the company has no idea whether recent performance will continue once restrictions are lifted. Like Strix, Bloomsbury also traded on 17 times forecast earnings before markets opened. It will be even higher after today’s 7%+ share price rise. Again, this isn’t an absurd valuation. However, it does imply that some (much?) of the good news is now priced in. 

Still, I remain a fan of this company. It might not grab the headlines like other UK shares, but I think that’s part of the appeal. Another is the £54m in net cash Bloomsbury had on its balance sheet at end of February.

Should shares fall back, I’ll be ready with at least some of my ISA allowance.

What happens next?

Here’s the bad news. Whether markets continue their downward descent in March is pretty much impossible to say. There are simply too many variables involved.

This being the case, it’s vital to separate signal from noise and only use the former to our advantage. In other words, investors need only concentrate on what they know or can control.

What we do know is that markets have always recovered over time… it’s individual companies that don’t. This being the case, it’s surely far more productive to look for high-quality businesses to buy on temporary weakness than it is to fret over whether global markets rise or fall on Monday.  

What do the best UK shares look like?

It’s subjective, of course. Nevertheless, I look to separate the wheat from the chaff using the following checklist. I want companies I invest in to:

• Solve a problem (if it doesn’t, why would anyone buy what it sells?)
• Be profitable (companies actually making money will always be more resilient than those dependent on hype)
• Offer multiple products (one-product companies are risky if fashion/demand changes)
• Generate repeat business (thus allowing me to be more confident on earnings)
• Have low/no debt (allowing a business to survive an inevitable crisis or two)
• Have great returns on capital (it makes lots of money from the cash it invests in itself)

Although there’s no such thing as a perfect company, many of my personal holdings tick many of these boxes. This explains why I’m invested in drinks firm AG Barr, laser-equipment supplier Somero Enterprises, kettle safety firm Strix and comparison website Moneysupermarket.com.  

Slow and steady

Buying even the best UK shares at a time when markets are falling takes guts. This fact is obvious when all is well but it can be hard to remember when the chips are down. 

I’m as susceptible to fear and greed as anyone else. In an effort to counter this, I think the most appropriate response is to adopt a ‘slow and steady’ approach. In practice, this means investing my money gradually. I may not be able to time my purchases perfectly but I’ve never met someone who can. The danger of trying is that the recovery happens before putting any capital to work. Ultimately, I may end up paying more than I wanted to. 

A slow and steady approach isn’t perfect. In theory, the more times I buy, the more commission I will incur. This is a problem since costs can have a huge impact on a portfolio’s performance over time, regardless of how good the actual investments are. One way I work around this is to take advantage of ‘regular investing’ plans that buy on the same date each month, vastly reducing what I pay.

Ignoring the noise, finding the best  UK shares to buy and keeping costs low is no guarantee of success, but it’s how I’m handling this latest market crash. 

Passive income generator

I’ve held a stake in kettle safety control supplier Strix (LSE: KETL) for some time now. I see no reason for this to change following Wednesday’s encouraging update on trading over 2020.

Yesterday, Strix stated it had seen “a marked recovery” in demand from July to December. This performance should see it deliver “modest” profit growth for the period. That’s pretty encouraging considering just how awful 2020 was for most businesses.

Of course, Strix’s small-cap status means its share price is likely to be more volatile than your typical FTSE 100 beast. As an investor with time on his side (I hope!), that doesn’t bother me. However, it might make the shares unsuitable for others with shorter time horizons. 

Positively, Strix appears to have started the year well. Talk of a “strong” order book for January and Q1 should help the company reduce debt even further and continue paying passive income to holders. As far as the latter’s concerned, a 7.7p per share total dividend becomes a trailing yield of 3.3%, based on today’s share price.  

Boring… but beautiful?

Another small-cap generating passive income for its holders is XPS Pensions (LSE: XPS). Analysts have estimated a 6.6p per share cash return in the current financial year (ending 31 March). Using today’s share price, this gives a chunky forecast yield of 5.5%. For perspective, the best I can get from a Cash ISA at the moment is a measly 0.55%! Trading at 12 times forecast earnings, XPS also looks very reasonably priced, in my opinion. 

Any downsides? Well, the likely share price performance is unlikely to quicken pulses soon. As the largest pensions consultancy in the UK, XPS will never attract the sort of attention that other stocks might. This being the case, I wonder if the biggest risk in buying XPS is the opportunity cost of not taking opportunities elsewhere. 

Still, if I was looking for a relatively mundane, uncyclical business that pays out cash to its owners without too much fuss, XPS surely ticks the box! 

Outperforming expectations

A final under-the-radar small-cap stock offering decent passive income is pawnbroker H&T (LSE: HAT). Benefiting from strong demand for jewellery, and the fact that most of its 253 stores could remain open, the company experienced “stronger than anticipated trading” in the final two months of 2020. This, H&T believes, will now lead it to outperform market expectations on profit for the full year.

Sure, some investors may be put off by the image of the industry in which H&T operates. The small matter of the company’s unsecured cash loans business being reviewed by the Financial Conduct Authority is an example of this.

For those comfortable with the ethics of this sector however, analysts currently have the company down to return 9.7p per share for 2020. That would equate to a 3.4% yield at the current share price. Factor in a £34m cash balance and no debt and I suspect cash payouts might rise again in 2021.

Furthermore, tax treatment for buy-to-let investments has historically been favourable – but not anymore. In recent years, the tax rules have changed, making buy-to-let investing considerably less appealing.

I’d consider investing in a basket of cheap UK shares instead. It can be done tax-free via a Stocks and Shares ISA. Currently, UK investors can shelter up to £20,000 per year, free from capital gains and dividend taxes. Not only can one invest in UK shares, but also in international shares, managed funds, investment trusts, and exchange-traded funds.

Which UK shares to buy for a passive income?

There are almost 2,000 UK shares in the London Stock Exchange to choose from. There are dozens of good quality companies that I would consider for a passive income. One of these is CMC Markets (LSE: CMCX). This is a UK-based company that provides online and mobile trading services.

It recently provided an update where it highlighted strong performance in its first half. It experienced strong trading performance across all areas of the business. In addition, Covid-19-related stock market volatility increased its client activity.

There is much to like about this company. Client numbers, revenues, and profits are all growing. It offers a good hedge against future market volatility that might arise. Further Covid-19 related disruptions, Brexit news flow, and the US election are all potential areas of volatility.

In addition, it offers a generous dividend of nearly 5% per year. This is great for investors looking for a passive income. I like UK shares that provide a dividend in addition to growing earnings. In particular, companies that can provide sustainable dividends, rather than providing a dividend one year and cancelling it in the next.     

So that management are aligned with shareholders, I like UK shares where the CEO owns a decent chunk of shares in the company. CMC Markets holds up well in this regard. Founder and CEO Peter Cruddas owns almost 60% of the shares in CMC Markets.

Put the kettle on

Another cheap UK share that pays a dividend is Strix (LSE: KETL). Paying out around 3.5% of dividends per year, I’d say it’s a decent option for passive income.

Strix is the world’s number one manufacturer of kettle safety controls. Almost 90% of its business is in this space. It holds a dominant position in this niche but is branching out to diversify into other business areas. Strix is aiming to deliver 14 new products this year.

I’d say that Strix is a good quality UK share that is financially sound, cash generative, and offers good growth prospects. With the share price trading 16% off its recent high, and an undemanding price-to-earnings ratio of 16 times, I’ll definitely consider adding it to my portfolio soon.