K3 Capital (K3C:AIM) 267p

Gains to date: 19.2%

Original entry point: Buy at 224p, 1 February

We like advisory firm K3 Capital (K3C:AIM) for the complete package it delivers for small cap M&A deals and it seems the market has caught on.

A trading update on 1 March says the company is trading ‘substantially ahead’ of management’s expectations for the year to 31 May 2018.

FinnCap analyst Jeremy Grime says: ‘The private equity space sees K3 as a good source of buying opportunities and this has driven 2018 year end revenue up 20% to £16.2m from our previous estimate of £13.5m’.

He’s upgraded forecast earnings before interest, tax, depreciation and amortisation (EBITDA) by 27% to £7m.

The good trading update helped to drive up the share price, meaning our Great Idea is now up by nearly 20% in a single month.

‘While the timing of transactions completing is unpredictable, K3’s direct marketing model has resulted in a more significant pipeline going forwards,’ adds Grime.

‘Their “bigger and better” strategy of moving up the value chain has resulted in 50% revenue growth in the current year, we estimate. The power of market leadership gives this business the ability to be a large quoted company.’

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