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The phrase 'The 90 per cent club' conjures up a certain unique feeling of dread in investor's minds. After all, with the leading index testing a six-year low, and prices on all markets depressed, the last thing you need is to be reminded of stocks that burned brightly before burning a severe hole in the wealth of the nation. Most investors want to forget the tragedy.

However, the problem with shunning the 90 per cent club is that, while it is definitely littered with the detritus of a thousand dotcom dreams, the prolonged bear market of the past few years means it is no longer populated by pure corporate disasters.

In the great sell-off of the past year or so, any growth company that its missed targets, warned on profits growth or encountered business strife (which, let us be honest, most growing business experience on their route to the top) has been sold down mercilessly. The net result is that the '90 per cent club' is now no longer what it seems.

With this in mind, we embarked on a spot of bottom fishing, trawling through the ranks of Aim companies that are now far below their issue price in the hope of finding value.

While many of the stocks we hooked were undoubtedly troubled, we found a surprising sprinkling of value and a host of stocks that seem to have restructured their way out of trouble. We even happened upon a few profit-making ventures awaiting the next cyclical upturn.

All, of course, carry financial hazards in one way or another, but intrepid, risk-taking investors should pay attention to the findings.

Restructured Opportunities

Despite its name (soon to be changed to omit 'Investments'), Buckland Investments is an electronics components manufacturer actually operating out of Thailand following the closure of its French subsidiaries. But even with the restructuring, its operations have been profitable, suggesting the meagre £900,000 market capitalisation is somewhat unjustified. Indeed, excluding the losses from its French businesses, and exceptional costs on their closure, Buckland actually made operating profits of £588,843 in the year to December. Including these, it only made a loss of £85,880, a big improvement on a £1.3 million loss in 2000.

These figures were produced during a period in which the electronics industry has been struggling through a worsening crisis, with demand from the telecoms arena particularly badly affected. That does not affect Buckland as much as many other tech firms because its SCART connectors and CRT sockets are used in consumer electronics products like video recorders, televisions and digital set-top boxes. However these worldwide markets are not particularly healthy either, though demand for DVD applications is growing.

John Beddoe of new house broker Seymour Pierce forecasts pre-tax profits will decline to £339,000 this year. But he rates Buckland a 'Strong Buy' as the 0.24p of earnings he reckons the group will throw off this year will give it a prospective p/e of just 2.6 (at the current price of 0.62p).

Pennant Hopes

In a frank exchange of words, Chris Thomas of Rowan Dartington admits his chief client, Pennant International, disappointed 'yet again' with its last results, adding, for good measure, that 'they were dreadful, really'. The company, which makes aircraft simulation kits for the likes of BAe Systems, made a loss of £894,000 for the six months to June, down from £1.3 million the previous year. Turnover declined from £5.3 million to £4.5 million.

But a long-awaited order to support Hawk jet sales to South Africa is apparently on the way and other delayed orders are coming through. Profits are expected next year, after a second half that should be cash-generative.

Thomas expects £500,000 pre-tax profits and 1.6p of EPS in 2003, after a loss of £1.4 million this year. Cash reserves are low, but the company is phasing the payments on its contracts better and should have sufficient working capital. It has also been successful at winning business from new customers.

On a prospective p/e of under 6 for 2003, and the prospect of some merger and acquisition activity, the shares could reward.

Global Concerns

One company that could be worth persuing for future prospects is virt-x, the now up-and-running alternative exchange for trading European blue-chip shares. The firm, formerly known as Tradepoint Financial, is 39 per cent-owned by the SWX Swiss Stock Exchange, with the Tradepoint consortium of major banks including Deutsche, Dresdner KW and ABN Amro holding another 39 per cent. No forecasts are available, but virt-x halved operating losses to £500,000 in the six months to June, on turnover also doubled to C22.9 million. With its shares at a 15p low, valuing the business at £42 million, the company could we worth a punt. It has struggled to build the amount of trades going through its platform to the levels it was aiming for, but profitability seems only a matter of time.

Internet travel business World Travel – a company that reached quarterly profitability in the three months to June – looks an enticing, if risky, venture. Chairman and chief executive John Biles has lately been busy cutting costs and curtailing the marketing spend, among other things. But the company still managed to grow its revenues from £1.2 million to £1.5 million in the first half.

House broker Credit Lyonnais forecasts a small pre-tax profit of £200,000 in 2003, after a loss of £400,000 for the current year. Cash looks to be something of a problem, with £200,000 of reserves dwarfed by £5.7 million of debts at the interim stage, but cash inflow is biased towards the second half.

Biles is confident the company is 'well on the way towards sustained profitability'. This makes the current market cap of £2.2 million (on a share price of 1.25p) look undemanding.

Longer Term Prospects

There are plenty of other interesting-looking companies out there that will probably take longer to show the fruits of their labour. Semiconductor industry verification software firm TransEDA has already made a profit, but difficult market conditions have led to a number of profit warnings and a loss of £1.4 million in the year to June. A return to profitability this year is largely dependent on the long-awaited semiconductor cyclical upturn, but it is well placed to ride out the current storm, with cash of £2.3 million.

Digital printing and software business Documedia Solutions (formerly known as ControlP) is also cash-rich, with £1.6 million in the bank at the end of June. Profitability was forecast for this year, although the market downturn makes this doubtful. Nevertheless, the early part of the year saw a big increase in turnover compared with the previous year, giving Documedia Solutions a somewhat oversold look at a market value of £1.4 million. The upcoming interim results should be worth a look.

Over at Samedaybooks.co.uk, 'bombed out' is exactly the right term, as the shares are worth virtually nothing, having been floated at 44p in 1997. But while any excitement in these shares is limited in the short term at least, the company is only narrowly loss-making and growing its business steadily. It could be one to hang on to in the hope of a takeover.

New brooms

Former private investor 'placings club' Web Shareshop could be worth a look for those wanting exposure to the speculative mining sector following serial resources investor Bruce Rowan's takeover. The company's net asset value on 11 July was 5.3p, more than double its share price.

On an even more speculative peg, West 175 Media could offer some interest once the board – now chaired by ex-Mirror Group chief executive David Montgomery – decides where to go with a group of traditionally underperforming business assets. Cash is tight after years of losses but, with Montgomery, Charles Sebag-Montefiore and 'one-man venture capital fund' John Gunn running the show, something interesting could be around the corner.

One tech company that might be worth looking at is smart-card specialist ID Data, the sixth-largest supplier of smart-cards to the telephony, banking and retail markets.

Despite its position, a collapse in demand from the key telecoms market – in which Marconi was a major customer – hit ID hard. It led to an increased loss of £4.8 million in the year to March, before £1.8 million of exceptional impairment provisions, on £17.9 million sales.

The ID board has reacted to these difficult conditions by cutting costs and taking a new approach to revenue generation (closing down the bulk of its manufacturing operations in favour of licensing out its technology to independent plastic card manufacturers).

Whether this will revive its fortunes remains to be seen, but the market was happy enough to commit £3.9 million net of expenses to the company in June.

Of special interest is the group's newly-launched Origin J software product, which enables the full features of Java computer language to be implemented on a single card, opening up multiple applications. Several orders have been received, one of them to supply cards worth £8 million to the Nectar consortium – Sainsbury, Barclaycard, Debenhams and BP – over two years. At a market capitalisation of £7 million, the company looks undervalued, with strong growth and takeover prospects expected in the future.

In the online world, commercial property services firm First Property Online is attractive as it has kept costs down and made clever acquisitions without spending a fortune.

The company, which was reversed into taxi cab failure Hansom in December 2000, already has a decent cash-pile, with £1.6 million in the bank at the end of March.

Revenues have been built slowly from the original property transactions side, but the purchase of Commercial Property Database and its website design capacities has brought in extra revenue at little cost. The large range of online property services that the group offers should stand it in good stead.