Idea Generation

---
name: idea-generation
description: "Use this skill when the task requires idea generation capabilities."
executor: LLM_BEHAVIOR
skill_id: finance.equity_research.idea_generation_2
status: ADOPTED
security: {level: high, pii: false, approval_required: true}
anchors:
  - finance
  - research
tier: 2
input_schema:
  - name: code_or_task
    type: string
    description: "Code snippet, script, or task description to process"
    required: true
output_schema:
  - name: result
    type: string
    description: "Primary output from idea generation"
---
# Idea Generation

description: "Analyze — Systematic stock screening and investment idea sourcing. Combines quantitative screens, thematic research, and pattern recognition to surface new long and short ideas. Use when loo"
## Workflow

### Step 1: Define Search Criteria

Ask the user for parameters:
- **Direction**: Long ideas, short ideas, or both
- **Market cap**: Large, mid, small, micro
- **Sector**: Specific sector or cross-sector
- **Style**: Value, growth, quality, special situation, event-driven
- **Geography**: US, international, global
- **Theme**: Any specific thematic angle (AI, reshoring, aging demographics, etc.)

### Step 2: Quantitative Screens

Run screens based on the style:

**Value Screen**
- P/E below sector median
- EV/EBITDA below historical average
- Free cash flow yield >5%
- Price/book below 1.5x
- Insider buying in last 90 days
- Dividend yield above market average

**Growth Screen**
- Revenue growth >15% YoY
- Earnings growth >20% YoY
- Revenue acceleration (growth rate increasing)
- Expanding margins
- High return on invested capital (>15%)
- Strong net retention (>110% for SaaS)

**Quality Screen**
- Consistent revenue growth (5+ years)
- Stable or expanding margins
- ROE >15%
- Low debt/equity
- High free cash flow conversion
- Insider ownership >5%

**Short Screen**
- Declining revenue or decelerating growth
- Margin compression
- Rising receivables / inventory vs. sales
- Insider selling
- Valuation premium to peers without justification
- High short interest with deteriorating fundamentals
- Accounting red flags (auditor changes, restatements)

**Special Situation Screen**
- Recent IPOs / SPACs with lockup expirations
- Spin-offs in last 12 months
- Companies emerging from restructuring
- Activist involvement
- Management changes at underperforming companies

### Step 3: Thematic Sweep

For thematic ideas, research the theme and identify beneficiaries:

1. Define the thesis (e.g., "AI infrastructure spending accelerates through 2026")
2. Map the value chain — who benefits directly vs. indirectly?
3. Identify pure-play vs. diversified exposure
4. Assess which names are already "priced in" vs. under-appreciated
5. Look for second-order beneficiaries that the market hasn't connected to the theme

### Step 4: Idea Presentation

For each idea that passes the screen, present:

**[Company Name] — [Long/Short] — [One-Line Thesis]**

| Metric | Value | vs. Peers |
|--------|-------|-----------|
| Market cap | | |
| EV/EBITDA (NTM) | | |
| P/E (NTM) | | |
| Revenue growth | | |
| EBITDA margin | | |
| FCF yield | | |

**Thesis (3-5 bullets):**
- Why this is mispriced
- What the market is missing
- Catalyst to realize value

**Key Risks:**
- What would make this wrong

**Suggested Next Steps:**
- Build full model? Deep-dive diligence? Expert call?

### Step 5: Output

- Shortlist of 5-10 ideas with one-page summaries
- Screening criteria and methodology documented
- Comparison table across all ideas
- Prioritized list: which ideas to research first

## Important Notes

- Screens surface candidates, not conclusions — every screen output needs fundamental work
- The best ideas often come from intersections (e.g., quality company at value price due to temporary headwind)
- Avoid crowded trades — check ownership data, short interest, and how many analysts cover the name
- Contrarian ideas need a catalyst — being early without a catalyst is the same as being wrong
- Track idea hit rates over time — which screens and approaches produce the best ideas?
- Short ideas need higher conviction — timing is harder and risk is asymmetric

---

## Why This Skill Exists

Analyze — Systematic stock screening and investment idea sourcing. Combines quantitative screens, thematic research, and pattern recognition to surface new long and short ideas.

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## When to Use

Use this skill when the task requires idea generation capabilities.

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## What If Fails

If this skill fails to produce the expected output: (1) verify input completeness, (2) retry with more specific context, (3) fall back to the parent workflow without this skill.

<!-- SR_40: auto-generated from frontmatter `what_if_fails` (OPP-Phase3). -->