Five AIM shares trading at a discount
Award-winning AIM writer Andrew Hore names the companies trading at a discount and with growth potential that appears undervalued and worth buying for the long term.
22nd May 2026 14:30
by Andrew Hore from interactive investor
In difficult and uncertain times investors may take a long-term view of shares’ fundamental value based on book value and earnings potential. These shares might even be trading at below their asset value.
It can sometimes take years for the stock market to re-rate these companies, so investors may have to be patient. However, if the estimate of their value and earnings expectations is true, the re-rating will eventually happen.
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Companies these days can have a significant proportion of their net assets made up of goodwill and intangible assets. Even if these are subtracted, there are companies that trade below their net tangible assets.
According to ShareScope, there are around 150 AIM companies trading at a discount to net tangible assets at their latest published balance sheet date. This includes some companies that are making significant losses, and this discount will probably reverse at their next balance sheet date as cash pours out of the company. Some, like Mirriad Advertising Ordinary Shares and Surface Transforms, have run into financial difficulties and put subsidiaries into administration.
There are investment and property companies included, and it is not unusual that these types of investments are trading at a discount to book value. There are some highly attractive discounts, though. At 29p, Mercia Asset Management is trading at 0.8 times net tangible assets. Their portfolio of assets is predominantly unquoted, so the valuations are estimates. That uncertainty does affect sentiment, but the business covers its costs so does not erode the asset value. Many of the investments are maturing, too, so profitable exits could be on the cards.
There are also commercial and industrial companies that are trading at discounts to book value and have strong prospects. Here are five companies trading at a discount to net tangible asset value with potential for growth in assets and profit that appear undervalued and worth buying for the long term.
Michelmersh Brick Holdings
74.5p
Bricks manufacturer Michelmersh Brick Holdings has had to steer through tough markets in the past two years amid pressure on pricing. The weaker demand is being used to rationalise the business, with the Charnwood site closed and investment made at other sites.
In 2025, revenues were 2% lower at £68.9 million, while underlying pre-tax profit fell from £9.9 million to £8.1 million due to a greater mix of lower margin products.
There is good order intake, but the timing of supply of these orders is uncertain. UK brick despatches are 10% lower in the first quarter of 2026. Energy has been bought forward, so there is limited exposure to oil and gas price rises this year. A recovery in pre-tax profit to £9.9 million is forecast for 2026.
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Net tangible assets were 78p/share and Cavendish forecasts a rise to 81.4p/share by the end of 2026. The share price is at a discount of more than 8%. There is expected to be continued growth in net tangible assets. The prospective multiple is less than 10 and the yield is 6.2%. Net cash of £1.5 million is forecast and the Charnwood site could be sold.
I have written about Michelmersh Brick in the past, assuming that there would be an upturn in housebuilding and construction. This has yet to happen to any great degree, though. When demand for bricks does recover, Michelmersh Brick is in a good position to take advantage. The yield is attractive, even if the share price takes a while to recover.
Sanderson Design Group
66.5p
Furnishings company Sanderson Design Group Ordinary Shares has an impressive stable of brands. The fortunes of the brands have been mixed, although some, such as Sanderson itself, are doing well. The UK remains a weak market, but management has focused on building sales in North America, and this is paying off with around one-third of brand sales in this market.
Pre-tax profit has been on a downward path, despite cost savings. Last year, there was a recovery from £4.4 million to £5.3 million despite a small dip in revenues. This year, revenues could edge up and pre-tax profit is expected to reach £6.5 million. That still leaves plenty of upside when consumer markets improve.
High-margin licensing income is growing, although the recognition of revenues can be lumpy. Manufacturing has returned to profit and, while online sales are a small percentage of the total, they are growing.
Forecast net tangible assets are 79.4p/share. This includes a recovery in net cash to £9.8 million. The discount to the share price is 16%. The dividend is expected to be maintained at 1.5p/share.
The prospective valuation multiple is 11 and it could fall to just over 9 next year. Sanderson Design has a portfolio of brands, including Morris & Co and Zoffany, that have significant underlying value not reflected in the tangible assets figure. That should underpin the share price until further evidence of recovery shows through.
The Duchess of Cambridge at Standfast & Barracks printworks, in Lancaster, in 2023. The company is part of the Sanderson Design Group. Photo: Dominic Lipinski-WPA Pool/Getty Images.
Time Finance
41.25p
Time Finance Ordinary Shares provides finance to small and medium-sized businesses through two core products: invoice financing and asset finance. There is a broad spread of sectors and clients, and the company has a good record with the quality of its loan book.
Net deals in arrears have fallen to 4.7% in the latest quarter, while debt write-offs were cut to 1%. This has been achieved while growing the lending book. The gross lending book reached a new record of £236.4 million by the end of February 2026. There are additional facilities available to fund further growth.
Net tangible assets are forecast to be 53.8p/share by the end of May 2026 and the share price discount is 23%. Cavendish is forecasting particularly rapid growth in net tangible assets and believes they could be 61.5p/share by the end of May 2027.
Pre-tax profit is expected to improve from £8 million to £8.6 million in 2025-26. That would put the shares on six times prospective earnings. There is no shortage of demand for finance from smaller businesses, and Time Finance is more flexible to the needs of its client base than a large bank can be. This means prospects are excellent, providing long-term growth potential for the share price.
Robinson
125p
Paper and plastics packaging manufacturer Robinson has a portfolio of freehold properties, some of which have been sold to finance the core business. The UK business is holding up well and gaining market share, but operations in Poland are finding it tougher with volumes falling 17% so far this year.
There could be cost increases due to the Middle East conflict, but management believes that these can be passed on to clients. A dip in pre-tax profit from £2.9 million to £2.7 million is expected in 2026. Capital expenditure is likely to be around £5.5 million in each of the next two years, but net debt should stay at around £5 million.
Estimated net tangible assets are 163.1p/share and there is a steady upward trend, helped by gains on property disposals. The share price is at a 23% discount.
The prospective multiple is just over 10, while the yield is 4.8%. The asset value is backed up by property assets, and further cash could be generated by surplus property disposals. Short-term prospects may be uncertain, but the discount is attractive.
Vertu Motors
62.5p
Motor distributor Vertu Motors is not immune to the tough car market, partly due to optimistic government targets for electric vehicle sales. The company has invested in its aftermarket business, which is improving margins. Chinese car marques are increasing market share and Vertu Motors is opening dealerships for these firms, including BYD Co Ltd Class H.
In 2025-26, pre-tax profit fell from £29.3 million to £24.5 million due to pressure on margins. Vertu Motors received £3.4 million of business interruption insurance relating to disruption from the Jaguar Land Rover cyber attack. Pre-tax profit could be broadly flat this year, although the period has started well.
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Historic net tangible assets were 75.9p/share, suggesting a share price discount of around 18%. Share buybacks may increase that asset figure. More importantly, properties are generally sold for greater than book value, suggesting the forecast figure could be conservative.
This is a cash-generative business and net debt of £61.3 million at the end of February 2026 reflects spending on acquisitions and investment in additional dealerships.
The shares are trading on 11 times forecast earnings and the yield is 3%. There is potential for recovery in profit when there is an upturn in the car market. Vertu Motors has shown that it can remain highly profitable and cash generative when conditions are difficult, and performance should improve from now on. That makes the shares an attractive long-term investment.
Andrew Hore is a freelance contributor and not a direct employee of interactive investor.
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