One multibagging FTSE AIM All-Share Index stock I'd buy, and one I'd sell

Conviviality(LSE: CVR) is the UK's leading independent wholesaler and distributor of booze, fags and impulse products. The company has 370 franchisees with over 700 retail stores, primarily under the Bargain Booze, Bargain Booze Select Convenience and Wine Rack brands. It also supplies hotels, festivals, events and so on.

In a half-year trading update today, the company said it "continues to perform in line with the Board's expectations." However, the shares are trading over 3% down at around 410p. Is there anything to be concerned about or is the dip simply an opportunity to buy a slice of the business at a lower price than yesterday?

Growth prospects

The group reported revenue for the 26 weeks to 29 October 7.9% ahead of the corresponding prior period, with growth across each of its business units. Management's strategy of improving the quality of the store estate and the number of multi-site franchisees looks to be working well and elsewhere it was encouraging to hear of an increase in sales to large national account customers.

The market's cool response to the update is doubtless down to a "more sequential" rollout of a software system across the group. The company said the result of this phasing will be that the associated cost savings will be more weighted to the second half of the financial year than previously anticipated.

I don't consider this to be a major issue. Conviviality has potential to deliver strong organic growth from its existing businesses and also opportunities to make targeted acquisitions. A current-year forecast price-to-earnings (P/E) ratio of 21.5, falling to 19 next year, and a starting dividend yield of 3.3% lead me to rate the stock a 'buy'.

Uninvestible?

I'm far less enthusiastic about the outlook for Internet of Things (IoT) firm Telit Communications(LSE: TCM). I was bearish about this company long before it emerged in August that its founder and CEO Oozi Cats and his wife, Ruth Cats, were Uzi and Ruth Katz -- fugitives from fraud indictments in the US in the 1990s.

Mr Cats has departed the company and presumably Mrs Cats has also abandoned her position of 'art curator' at subsidiary Telit Wireless Solutions (assuming she and the Ruth Cats of a LinkedIn profile are one and the same). I'm not sure every IoT firm worth its salt has need of an art curator and for me this and other matters raise serious questions of integrity and governance at the company.

Some of my other major points of concern are that finance director and now interim CEO Yosi Fait sold 488,567 shares at 310p (netting himself £1.5m) on 28 June. This was two days before the company failed to meet one of its banking covenants -- a fact that was only revealed in a note in the firm's half-year results in August. Does this also put into a different light a £39m placing in May to fund "several identified acquisition opportunities ... which the Company will look to execute in the near-to-medium term"?

Other matters, including news last week that the Financial Conduct Authority is making preliminary enquiries into the company -- albeit it is "not under formal investigation" -- only reinforce my view that Telit is uninvestible right now. As such, I rate the stock a 'sell'.

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G A Chester has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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