Get trading opportunities to your inbox

There’s no charge for this.

In addition to regular trading opportunities, I would also like to receive the Weekly Newsletter and occasional Market Report emails. You can unsubscribe at any time.
Getting latest data loading
Home / Special Reports / Small Cap Sparks

This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.

16 March 2015

Small Cap Sparks

It's likely you’re all au fait with the FTSE100, but something like FTSE Small Cap or AIM may not be as familiar. And if you’d heard of the indices, what do you know about their constituents? The likelihood is that it's not a lot - small cap shares or ‘alternative investments’ as they’re also known don’t benefit from the attention their blue chip counterparts garner from thousands of analysts worldwide. This means they are largely under the radar of the institutions which is good for you, the trader, since you have the opportunity to get in there before the big hitters snap up swathes of shares and effect large price movements.Small cap stocks are popular with the investor seeking high growth potential over the longer term - a company with a (small) market cap of $500m has more potential to double in size than one with a market cap of several billions. Indeed, FTSE100 heavyweights Barratt Developments (BDEV), St James’s Place (STJ) and ARM Holdings (ARM) were once small companies that have doubled in size (possibly more than once) over their lifetimes. How would it feel to have gotten into those stocks early?!Hindsight is a wonderful thing, of course, and that is why in this exclusive report we want to equip you with foresight by taking a look at several small cap stocks that are extremely popular right now for their potential to register huge share price moves of 5% or more in a single trading day, and even double (or halve) in size over the long term.Whether you are a short term trader looking to profit from high intraday volatility or a long term investor seeking the next market leading tech stock or challenger bank, the small cap indices are where you need to trade.See below for our small cap stocks to watch in Q2 2015.

Gulf Keystone Petroleum (GKP)

Gulf Keystone Petroleum Ltd (-)

GKP table

Gulf Keystone Petroleum operates in the….Gulf, with the majority of its wells in Kurdistan, ostensibly part of Iraq and one of the cheapest places to drill on Earth. The Kurdistani deposits are huge - almost 1/3 of those in Iraq where about 1/10 of the world’s oil comes from – and the cost of finding and extracting one barrel is, to GKP, a mere $12.

But there’s a catch. In 2014 GKP found itself caught in a standoff between Kurdistan’s semi-autonomous government and that of Iraq that left the oil producer blacklisted by the latter, unpaid for tens of millions of barrels already extracted for export and quite frankly in a situation every bit as sticky as the crude itself. Shares plunged by 30% between March and October, when withheld funds finally began to trickle out and GKP began to get paid.

Fast forward to this week, and shares have recovered 24% from their October lows and have had a good 2015 so far as investors pile in ahead of a potential takeover bid. With volatile trading channels linking the major highs and lows, GKP presents just the type of news sensitive stock small cap investors love.

Quindell (QPP)

Quindell Portfolio PLC (-)

QPP table

The infamous insurance claims outsourcer went on a shopping spree after a £2.9bn listing on London’s AIM exchange in March 2014, snapping up all manner of small companies in such diverse and colourful sub-sectors as law, solar panels, scaffolding and loft insulation. Come April, research firm Gotham City dropped a (nigh on nuclear) bomb, calling Quindell ‘a country club built on quicksand.’

Short sellers took center stage and rode the decline as shares plummeted 40% in one day! Oh, and did we mention three of QPP’s directors got in on the action in November? You couldn’t make it up.

In December, Quindell admitted that cash, a key metric of performance, had ‘not been as significant as previously anticipated.’ As we write, QPP is in talks to sell its legal business while it confirmed Thursday that it had sold its 25% stake in the National Accident Repair Service. Shares have rallied an astronomical 187% from December ’14 lows in true small cap fashion. Definitely one to watch in the coming quarter.

LGO Energy (LGO)

LGO Energy PLC (-)

LGO table

GKP’s oil-seeking sibling, LGO Energy operates in the Caribbean - worlds away from turbulent Kurdistan - and 2014 was a big year for the company. Having acquired the Goudron oil field in Trinidad, LGO’s shares caught fire after the company issued a statement confirming ‘proved and probable’ reserves totalling up to 7.2m barrels with a further 15.9m of contingent resources.

LGO obediently quadrupled in size between March and September 2014  as the share price fountained 456% before the collapse in oil prices finally came to bear on the stocks, seeing them enter a volatile but shallow downtrend in Q4 which remains to this day.

Continual reinvestment of profits onto drilling new wells in the Goudron field saw group production of around 1200 barrels per day (bpd) on 4 Dec turn into 1000 bpd from just one well on 15 Dec!

On the flipsidenowhere near all of LGO’s wells are producing 1000 bpd, leading many to believe the company is overvalued. Will LGOs astute management guide the company through the oil price doldrums and on to blue chip status in the coming years? Will the short sellers be partying on the beach? A bit of both, probably.

Afren (AFRE)

AFRE table

Another oil and gas prospector, Afren’s glory years were in the noughties when commodity speculation the world over was rife and there was good money to be made. After its IPO in 2005, shares skyrocketed 216% and while the financial crisis saw a reversal of fortunes, as it did for most small cap stocks, in 2010 investors piled into its $450m 10-year bond to finance acquisitions and well drilling in Africa. In 2013 the share price was still up 200% from the time of listing.

The collapse in oil prices has affected profits though, and the burden of debt has led to a massive default on interest payments in February. Afren currently has over £1bn in debt and, having sacked its CEO and COO for gross misconduct last year, has brought in ‘turnaround specialist’ Alvarez & Marshall to attempt a rescue.  With oil having potentially bottomed out and shares currently trading at around 5.5p, is Afren undervalued as we move into Q2 of 2015? Or has it got further to fall? How much furthercan it fall?!


major attraction of small cap stocks is that they garner little or no attention in the City. As far as the trader is concerned, this means that the small cap universe is so under-reported as to make many small cap stocks improperly priced (also known as arbitrage). The savvy trader who invests time as well as funds can profit considerably in the short term from such arbitrage by speculating on perceived pricediscrepancies.

It's All About the News

Small cap traders don’t get bogged down in technicals. Alternative investments simply don’t move enough on a daily basis to make the statistics work. But when they do move, boy do they move! Suchhuge swings are initiated by news and perpetuated by flurries of intense trading. The most popularsmall cap stocks are the ones with a juicy story behind them – think management controversies, volatile relationships with foreign governments (a la Gulf Keystone), wild punts and adventurous forays into unknown business territory.

All of the above help to make small cap stocks the rollercoaster ride they are. Read the news right, and you stand to profit handsomely from the huge price moves they make - whether they go up or down.

Buy or Sell?

At Accendo Markets we don’t tell you what to do. It’s your call whether you buy or sell. Our aim is to provide the help you need highlighting opportunities which may be profitable to you, the trader, and assist you in making trading decisions from which you can benefit by the use of leveraged instruments.

Armed with the information we can give you, as a trader/investor you can make your own decision about what you consider the best opportunities in terms of stocks having potential to rise or fall. It’s your choice as to what you trade and in which direction.

Don’t forget, while many brokers focus purely on what to buy (tapping into investors’ natural bullish bias), Accendo Markets provides trading facilities that allow you to speculate on falling prices (‘going short’). If, for example, you thought a poor trading update would see a share price fall 10%, you could attempt to profit from the decline using one of our trading accounts.

For any questions on how to trade UK stocks via CFDs or shares, including ways in which your risk can be managed, call us to discuss on 0203 051 7461

Page: 01

This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.

Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

4.81 Average

156 Reviews


I have found Accendo staff very helpful,,and informed. I have traded with you for some years now and have no regrets. Keep up the good work!

Posted 1 year ago

Shaun D

since signing up for Accendo I have had two traders, Mark and Sam. I have found both of these to be very informative about how CFD's work and they have made it very easy for me. Since working with Sam (last four months) my trading knowledge has improved and I can make more informative decisions about which Company's to invest with. Keep up the good work Sam.

Posted 1 year ago


I am very happy with the service I get from Accendo Markets and in particular Amrit Panesar. He is very professional and pleasant to speak to and this counts for a lot.

Posted 1 year ago

Shreekant P

Its a good site for dealing stocks worldwide and having good staff.

Posted 1 year ago

Nick W

Krishan Appiah is one of the most dedicated / informative broker I have ever had.

Posted 1 year ago

Thomas I

Since I have been trading with Accendo Markets I have experienced much greater success than has been my experience with other trading companies mainly due to the help given by, what I consider to be my terminal with the trading floor, Mark, who has been most helpful in reminding me of the progress of my positions throughout the day and keeping me in touch with those positions so that I can more easily make successful trades when appropriate instead of missing out on opportunities through lack of attention. He draws my attention to the situations and enables me to make profitable trades. I am very happy with the situation at the moment and am enjoying the experience. Thomas Irving.

Posted 1 year ago

Kartik A

Accendo markets keep me connected with the market and its very well followed by Mr. Krishan Appiah ,which helps me to take certain decision on time.

Posted 1 year ago

Peter p

I have been trading with Accendo Markets and James Abbott my account manager for coming on 5 years now, James Abbott the senior trader of Accendo Markets provides me with up to minute information when I need it and find him very easy and professional to deal with. Whenever I need to trade or am not sure about anything James is always their to help with any queries I may have. The Accendo Platform I find very easy to use and navigate although it has been slightly changed over the years but definitely for the better. Personal when I do trade 90% of the time, I rather telephone call to place my trade dealings and if James is not there to take my call I find others at Accendo like Sam, Lee take my trades and are. All in all everyone at Accendo Markets are amazing to deal with and my relationship with Accendo is just as I like it. Peter Petrou

Posted 2 years ago

Mrs. J

"Our Trader, Aymen Azizi, has been nothing but attentive to our every need throughout our long relationship with him. No issue is too small, full explanations on all our questions."

Posted 2 years ago

Brian R

I have been with Accendo for a long time now, ten or twelve year's, probably more . As I told Sam (my trader) I thought that CFDs were better than sex . I stopped trading for a few years and only started back about a couple of months ago. But it is as if I had never been gone , so to speak. Sam has helped me every step of the way, at my age one forgets things. I have only praise for Accendo and as far as I am concerned the platform is the best . Now I am back trading at 71 years of age, I might even try sex again. Brian Robertson.

Posted 2 years ago

Jim W

I understand how to make a profit with CFDs. I am restricted by the range of companies I have knowledge of. Although, I am not sure that is a big problem. Tom Robertson is a very fine man.

Posted 2 years ago

Rebekah S

Well, I would not be trading without the help of my trader, Sam Alnakkash. He provided a really great overview of Accendo Markets, an insight into trading in general and how to get started in trading online. His advice, support and training has been fantastic all along the way, enabling me to start trading earlier than I would have done had I not had the support. He has also been very adept at understanding me as a client in order to help me achieve my trading goals. I still have a lot to learn and hope I will get there.

Posted 2 years ago

Nick z

I like the updates on shares I trade. Updates from Bloomberg and Reuters plus industry updates and breaking news. I've had Matt Grice and James Abbott and found both to be excellent. I would like to continue a personal service with James. He understands how and which stocks I trade.

Posted 2 years ago

Steve O

Excellent, knowledgable broker interaction and communication, coupled with very good research and analysis.

Posted 2 years ago

William P

Being new to direct trading I needed help and was given all the time and advice that I needed to feel fully able to make decisions on what I wanted to invest in. I asked for and got exactly the type of info I required provided by Tom Cook, who I would recommend to anyone looking for help.

Posted 2 years ago

Mr. W

I have been dealing with accendo for the past 8 years my broker Amrit I find him very helpful when he is there lol and had many offers to change but will not do it Bill Roberts

Posted 2 years ago

Zoran N

Very good all round service! Timely market information. (charts + trends coverage ) On the ball accounts managers ,quickly available and alert . Part of my success owed to my personal manager Mr Sam Springet , than you.

Posted 2 years ago

Mr Brian C

Easy to deal with.....

Posted 2 years ago

Muhammed S

Accendo markets are great for trading cfds and their research is second to none! Aymen manages my account is extremely helpful and always keeps me updated on market info. Thanks again

Posted 2 years ago

Mr Buta B

Always available, whenever I call I get straight through to someone that can and will help. The staff are very knowledgeable, helpful and easy to talk to.

Posted 2 years ago

Stephen B

Aymen Azizi keeps an eye on what is happening in the market and informs me with timely relevancy, email call, and txt.

Posted 2 years ago