Idea Hunting with Tikr

A different way to generate ideas

One of the things I enjoy discussing with other investors is how they find ideas. I am always on the hunt for a new way to find ideas and look at the investing world in new ways. Something I have experimented with lately is what I would call, for lack of a better term, intelligent brute force research. I saw this excellent tweet (X?) from Dirt Cheap Stocks earlier this summer. The simplicity of this idea consumed me. What if I actually tried this out instead of bookmarking the tweet and never coming back to it?

I found this is possible with nothing more than a TIKR subscription and a few hours on a weekend to get organized. Nothing about this is sophisticated, but I don't think it needs to be. Before I begin, I should mention something. This process is for those of us who have to bootstrap our investing journey. This isn’t for people who work at a fund and have access to a Bloomberg Terminal and expert call network subscriptions. 

I chose to test this theory on the AIM exchange for a few reasons. First, there are a manageable number of companies to sift through - only around 700. I ran a screen for all AIM companies, price, and industry. After running the screen, I copied the data into Excel and prepared to go through each company. Before starting I set my own criteria - under £500 million market cap, no banks, no biotech, <100M SO, domiciled in the UK, revenue generating, profitable/near profitability/interesting enough for me to follow (clearly very objective). Second, AIM companies report semi-annually. The semi-annual reporting has been critical with testing this out because I don’t give this strategy a lot of time every day. There are fewer filings to read and there is a built-in lag period if I need to catch up or want to dive deeper and learn more about a company. Third, nearly everything issued from the companies has an outlook paragraph that updates the company’s progress and developments. The outlook section is critical because there is often a lag in AIM companies between issuing updates and the market reacting. I have seen multiple times a company issue a trading update stating they are “trading ahead of market expectations” and the stock doesn’t react until the next set of interim numbers are published. Additionally, AIM companies are generally less promotional than in the United States and more realistic in their expectations for company performance. 

Next comes the part many of us are familiar with - the grind of sifting through each name one by one and determining companies worth following. Instead of looking for an idea to invest in, I searched for companies to follow. Following my criteria, I identified 181 stocks out of the 687 screened. After identifying the stocks, I set up 3 TIKR watchlists (75 max per watchlist).

I go through the 3 watchlists Monday-Friday and check for new filings. If I’m in a rush that day, I just re-read the business description to start learning the companies better, skim the numbers, and read the outlook section. If the company is getting interesting, I’ll keep digging. If not, I have not discarded it forever like I used to do through brute force A-Z idea hunting. If the company gets more interesting, turns its operations around, or has a key development, it will show up again in a filing.   

What’s been most interesting is the idea generation results from implementing this. In less than two months I have already found three interesting situations. These are all in varying stages of research, but I want to illustrate this isn’t a theoretical post - I believe this works for idea generation. 

SpaceandPeople plc (SAL.L)

SpaceandPeople is a tiny £1.6 million market cap company focused on offering retail space for companies. Their offerings include brand activations in highly visited areas and Rock Up and Pop Up (RUPU) retail kiosks that let online/nascent brands establish a physical retail environment. The RUPU service ends up being a win for everyone - SpaceandPeople gets business, malls get new businesses to attract customers, and the business gets to test physical retail space. For brand activations, their Experiential Space UK website lists many highly desirable locations around the UK and includes pricing and footfall numbers to help agencies determine locations for brand activations. I (delicately) asked the CFO, Gregor Dunlay how such a small company was getting access to “A” grade public spaces. He told me “Venues want to work with SpaceandPeople because we have a track record of delivering performance to agreed targets and because we deliver products and services into their spaces that are unique to us and desirable to our clients.” 

During Covid, SpaceandPeople scaled down their business, including exiting India. FY 2023 was the first year since 2019 the company was profitable without any government support. Earlier this year, the company’s key agreements for space with Network Rail and ECE (Germany) were both renewed until 2029. Now with key contracts in place, the company has breathing room to operate and expand their business.  

I asked the CFO about the expansion into other European countries and how they are entering - e.g. Anchoring to a train station like they do in the UK? 

“Our plan is to list the top footfall strategic locations in any country that we enter (this will include public realm, stations and Shopping Centres). At the moment we are very much focused on the countries surrounding Germany as they are the easiest to serve logistically.”

To be clear, I’m not sure if their entrance into new markets will be successful. But I do like the strategy of focusing on markets that are easier logistically as opposed to halfway around the world. 

Tristel plc (TSTL.L)  

Tristel is a £194 million market cap company that makes hospital disinfectants for hospital surfaces and medical devices. Importantly, the company is not a one-solution product. Their revenue inside a hospital is diversified across different specialities for cleaning different medical devices. 

As I’m currently re-reading Peter Lynch’s One Up on Wall Street, I can’t help but think this company sounds like a perfect Peter Lynch stock. Boring name, extremely boring industry, repeat business, profitable, and a clear path to growing earnings in future periods.  

TSTL.L recently entered North America, and is selling its cleaners effectively into the United States and Canada. And to tie it all together, per the company’s Outlook Statement, the expansion into North America will drive their next leg of growth. 

Touchstar plc (TST.L) 

Touchstar is a £7.6 million market cap company that supplies data collection and mobile computing solutions for a host of different sectors. I’ll be honest - even though I love investing, this is the kind of company that makes my eyes glaze over. I’m not an engineer or savvy in computer science. But there is something interesting about TST.L.

On September 26th, TST.L announced a strategic review. 

Granted, it is impossible to know what the outcome will be. Since announcing this, TST.L issued a trading update earlier this week stating their 2025 outlook is unchanged, but their H2 2024 numbers will be slightly below expectations. The point is, this is a potential special situation I would not have been aware of without the TIKR filing/screener system. 

Conclusion

It’s still early and only one exchange, but I’ve found the daily flow of filings in an organized, manageable way is helping me effectively source unique ideas. I’m excited to refine this process and see how it works for a different exchange. If you know of any exchange you think strategy would work well on, please let me know! 

Disclosure: Long SAL.L.   

For entertainment purposes only. This is not investment advice.