The best value stocks aren’t always to be found on the FTSE 100 or the FTSE 250. Smaller UK stocks can often be riskier to investors. But the growth heroes of tomorrow are also to be found on London’s other stock indices.

Here’s a collection of AIM shares I think could be too cheap to miss. I think they could deliver exceptional returns during the next decade.

Agronomics

The soaring popularity of animal-free diets provides terrific investment potential. A report by Acumen Research suggests that the lab-grown meat market will be worth $517m by 2030. This will represent a compound annual growth rate north of 16%.

I’d buy shares in Agronomics (LSE:ANIC) to exploit this theme. This company invests in producers of cultured meat and other products developed via animal cells. These include lab-grown chicken manufacturer SuperMeat, artificial beef maker Mosa Meat and cultivated leather producer VitroLabs.

Last year, the company made 15 investments. It also formed two of its own companies, including cultured pet food manufacturer Good Dog Food.

Agronomics currently trades on a forward P/E ratio of just 7.1 times. Competition in the cultivated meat sector could grow rapidly as multinational food producers also spend heavily here. But I still think this AIM share is worth close attention at current prices.

Strix Group

Safety device manufacturer Strix Group offers low earnings multiples and bulging dividend yields. For 2023, it boasts a P/E ratio of 7.3 times and a yield of 7.8%.

The business is best known for manufacturing safety controls in kettles. This is a highly defensive market in which the company commands an impressive 56% share. It also operates in the fast-growing water filtration market and has significant liquidity it can use for earnings-boosting acquisitions.

Near-term profits could suffer if the Covid-19 crisis in China continues. Recent lockdowns have hit production at two of its five biggest customers. But with cash to spare I’d still buy Strix for my portfolio.

Keywords Studios

I already own Keywords Studios (LSE:KWS) stock. I bought the software development services business to capitalise on the booming video games market. It provides help to the world’s largest tech businesses such as Microsoft, Electronic Arts and Nintendo.

At current prices, I’m considering adding to my holdings too. It trades on a forward price-to-earnings growth (PEG) ratio of just 0.2. Any reading below 1 indicates a stock is undervalued.

Keywords makes games run smoothly, tailors them to local markets and supplies artwork and audio services. Latest financials in November showed it was on course to grow revenues and pre-tax profits around 32% and 28% respectively in 2022.

Like Strix, the business is looking to supercharge future earnings through acquisitions (it made purchases in the US and Italy last month alone). Be warned though, an acquisition-led growth strategy can throw up problems. Unexpected costs and disappointing revenues can be common with M&A.

Credit: Royston Wild – Motley Fool UK 2023

The author has positions in Keywords Studios Plc. Views expressed on the companies mentioned in this article are those of the writer

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