You would be forgiven for thinking that I despise AIM listed stocks and even the most cursory of looks back though the articles on this website would be clear evidence of that.
But not all AIM stocks are garbage.
Some are simply mispriced by the market in the good old fashioned Grahamite sense of the idea.
Take Space and People (LSE: SAL).
Back in April I identified Space and People stock based purely on the fact that the share price was priced at multi year lows.
As a reminder here’s what I published at the time:
They (Space and People) are trading way below their capacity to post positive earnings and to grow those earnings and at current prices the market is simply underestimating the new management team that have already made changes to the way they operate not only as a team but as a more focussed business with a new product offering for customers.
In plain English the market had discounted the fact that the management team know what they are doing, know the problems of the business and were already on the way to fix those problems.
In addition I also remember the amount of deals/contracts that SAL were churning out. It seemed to me at the time that they were just a tidy little business getting on with selling and managing their space and new kiosks they had recently developed.
All of this makes the announcement on 26 June that SAL have been granted preferred bidder status by Network Rail and subsequent massive price rise welcome but not at all surprising.
The announcement is just part of a long list of positive news announcements that were simply ignored by the market when SAL’s share price was languishing at multi year lows.
Yes a binding contract needs to be finalised but the momentum is with not against Space and People in my view.
But what next for Space and People after such a dramatic rise in the share price?
Well I’ll be holding on to my shares despite the current overvaluation of the entire market and the imminent Grexit. I’m unable to to say when either the Grexit will happen or when a bear market correction will occur all I know is that I’m sticking to my guns based purely on the very smart management team at Space and People who also happen to have a motivated sales team.