I’ve principally purchased FTSE 100 dividend shares recently however in January I threw warning to the wind and acquired a red-hot AIM-listed progress inventory as an alternative. And I haven’t regretted it for a second. Cosmetics specialist Warpaint London (LSE: W7L) has been driving my portfolio upwards and I’m optimistic that’s going to proceed.

I do know little concerning the cosmetics business, however I do know that if a progress inventory retains mountaineering earnings steerage, it’s heading in the right direction. Even higher if it has ample money reserves, no debt and pays dividends, too. Warpaint does all of this.

I wasn’t the one one to have noticed its potential. Its shares had been going gangbusters. That tempted me, but in addition scared me. What if this was speculative froth?

Warpaint is profitable

So I did extra research, and acquired it anyway. I made a decision that if Warpaint was doing this effectively in the midst of a cost-of-living disaster, it might do even higher when customers had more cash of their pockets.

Its most important manufacturers, W7 and Technic, are offered each within the UK (together with Tesco), and by way of native distributors and retail chains within the US and Europe. Warpaint has an e-commerce enterprise in China too. These are early days, however the progress potential is big.

In April, the group posted report full-year earnings, up 136% to £18.1m, with “significant” progress in all geographic areas.

UK revenues jumped 17.6% however have been overwhelmed by US gross sales progress of 36.8%, whereas EU revenues trumped each leaping 60.5%. The board hiked the full-year dividend 27% to 9p a share. The trailing yield in the present day is 1.53% however I believe that underplays its progressive potential.

Thus far, I’m up 40.96% and completely satisfied I took the punt as a result of Warpaint is on a cost. The board has simply raised £31.5m by issuing seven million shares to broaden the shareholder base and place itself for future progress.

AIM alternative

That hasn’t harmed present shareholders. The Warpaint share price is up 145.05% over one yr and a thunderous 503.11% over 5.

Cosmetics is a aggressive business. Vogue adjustments shortly and social media has accelerated the method. Whereas Warpaint’s reasonably priced manufacturers have been in demand through the downturn, customers might commerce up after they have extra cash to spend.

Persuading extra US shops to inventory its manufacturers may very well be vastly rewarding, however requires very laborious work. Its Chinese language progress might fall sufferer to a commerce conflict with the West. Trading at 31.68 instances earnings, the inventory is susceptible to setbacks.

But the outlook is shiny and I’m betting that Warpaint will hold charging alongside. I’ll purchase extra when I’ve the money. Then I’ll begin searching for my subsequent progress inventory. There are many alternatives on the market. Like Warpaint, I’m simply getting going.