2 hidden-gem AIM shares to buy today!

Most stocks of companies with small market capitalization sold off sharply in 2022 as investors fled safer investments. At FTSE AIM All-Share the index fell by around 30% last year. However, I think this has created some interesting buying opportunities. Here are two stocks I would like to buy that are selling for cash.

Manage higher

Share women’s clothing brands online Sosandar (LSE: SOS) is up 25% since the turn of the year. However, over the course of a year, the stock is down 8%. Today it trades at 25p per share.

Why the recent uptick in investor enthusiasm for stocks?

Well, firstly, the retailer released an optimistic Christmas trading update this month. In the third quarter to 31 December 2022, annual revenue rose 30% to £11.6m. This is a new record and represents the fifth consecutive profit.

During this period, every product category experienced growth. And our existing online partnership with John Lewis, Marks & SpencerGreat Group, Nextand JD Williams also posted a record quarter for third-party sales.

Then this week, the Cheshire-based company announced it had secured a partnership with the supermarket giant Sainsbury’s. Importantly, this deal will see Sosandar expand into retail for the first time, giving it an omnichannel presence.

For the year ending 31 March 2023, management expects profits of £42.8m, with pre-tax profits of £2.0m. With a market capitalization of £55m, this gives the stock a price-to-sales (P/S) ratio of 1.4. For a young, fast-growing company, the price seems attractive to me.

In addition, the company has £4.2m in cash and no real debt on its balance sheet.

Nice little niche

I like that Sosandar doesn’t try to be all things to all people. It has carved a nice little niche for itself catering to style-conscious women who have graduated from fast fashion.

It sells modern clothes at affordable prices, but not as cheap as boohoo or ASOS. This should allow the company to generate and maintain a healthy profit margin over time.

I also like that Sosandar’s co-CEOs, Alison Hall and Julie Lavington, are also co-founders. He is the editor and publishing director of fashion and celebrity magazines Take a look before the launch of Sosandar in 2016. So he has an intimate knowledge of his customer base.

Of course, there is a risk of a major slowdown in consumer spending during a recession. Still, with the company now entering a profitable growth phase, I would open a position in the stock.

Brave new flesh

The second AIM stock I bought was a venture capital firm Agronomy (LSE: ANIC). It reveals a portfolio of more than 20 start-ups involved in the rapidly growing field of mobile agriculture. This involves growing meat directly from animal cells instead of raising and slaughtering animals.

Once the realm of science fiction, this is now reality. Agronomy thinks that processed meat can reach 35% of the global meat market in 2040. Meanwhile, McKinsey estimates that this market could be $25 billion in 2030.

At 13p and with a market cap of just £129m, this stock is often very volatile. However, it is down 63% from the all-time high of 35p reached in May 2021. I have acquired shares from Agronomy, and I am ready to buy more.