We research a company when an event indicates that a change exists that could create investment value.
Management changes often lead to other significant changes (e.g., asset deployment, R&D, or strategic focus) that can dramatically alter the way a company performs.
Acquisition / Consolidation
Acquisition/consolidation resulting in a company becoming a more dominant or efficient player in its business or industry.
Divestiture / Spin-Off
Divestitures/spin-offs may create higher valuations due to transparency and simplicity as in a complex company becomes easier to understand and leads to greater investor interest.
Company generates sufficient free cash flow to buy back shares and believes stock is undervalued or company redirects cash flow to significant debt paydown.
An industry undergoing a significant change due to consolidation, technological advance, or regulatory change, can create a favorable investment opportunity.
We look for an activist mentality among management.
We scrutinize management’s past experience and record and the viability of their proposed plan of change. A shareholder friendly capital allocation mindset, significant stock ownership and alignment of compensation incentives are prerequisites in evaluating management. In addition, we often engage with Board members when evaluating both the company and management.