STRATEGY
LONG VALUE ORIENTED EQUITIES
Lowell Capital Value Management (“LCVM”) invests in businesses it believes are trading at a significant discount to their intrinsic value, defined as the price an acquirer would pay based on the discounted value of the future free cash flows available to shareholders. LCVM believes that stronger, better businesses are able to consistently generate free cash flow, and thus its focus on free cash flow eliminates many weak business models.
Free cash flow can be used to increase shareholder value in four ways:
1
Share Repurchases
2
Dividends
3
Debt Reduction
4
Accretive Investments
The consistent generation of free cash flow creates a “catalyst” that helps realize value and reduce risk. The goal is to assemble a small group of companies that have predictable cash flow generation and attractive valuations (low P/CF, low P/E).
SHORT / PUT STRATEGY
LCVM’s primary focus is long positions in equities it believes are under-valued. However, LCVM may also invest in put options or short positions in indices or companies which it believes have valuations significantly exceeding their intrinsic value and which have some form of “catalyst” that is likely to negatively impact the valuation.