We Believe In Value

Galloway Capital Partners is focused on generating returns by combining fundamental long investing with a deep value/activist strategy. We aim to achieve risk-adjusted superior returns from low, beta-adjusted net exposure generated from a value oriented long portfolio across all market capitalizations and industry sectors. We target profitable companies with strong balance sheets. We have a sub-focus on undervalued Special Situation investments which tend to have little analyst coverage and outsized return potential.

Galloway Capital and its team have a proven track record in challenging market environments and economic cycles.

MAN vs MACHINE

Bruce Galloway speaking at the Opal Summit, Hedge Funds and the Rebirth of Active Management

For 100 years, Value has outperformed Growth stocks. But in the last 13 years, Growth has outperformed Value by over 300%. Why? We believe it is due to the proliferation of algorithms, derivatives, and ETF's into the stock market.

These algorithms have fueled continued investments in large cap growth stocks even as new highs are reached and valuations become more extreme, hence, even more buying. This in turn has led to the technical shorting of lower-priced value stocks. We believe these factors create a buying opportunity that these programs have over looked and yielding us superior returns. This is our advantage!

Research vs Algorithms

We have developed a strategy to outperform the bots at their own game. We can identify what the bots are targeting and use this as a buying or selling opportunity to our advantage. We typically invest in value stocks that have a catalyst or group of catalysts that will likely trigger the bots and algorithms hence, reverse their targeted companies - readying to a upward trend.

Galloway Capital Partners Man Against Machine

Selected Activism Investments

Our Process

400-500 Companies

Target Universe

Publicly traded securities
Undervalued Companies
Stocks trading below intrinsic value at significant
discounts to their all time trading highs

Typical business characteristics

Understandable businesses
Significant growth potential
Limited analyst coverage

Internal Research

SEC filings
Press releases
Publicly available information

Company contacts
Discussions with industry contacts
Buy-side and Sell-side analysts

70-100 Companies

Analysis

50-75 Companies

Value-driven approach

Financial criteria screening
Technical criteria screening
Financial review and ranking

Portfolio analysis and construction
Stock selection and trading

Qualitative

Meet with management
Assess board members
Assess shareholder base

Review and analyze
Management's business plan

Portfolio

The typical holding period is 12-36 months
Diversified portfolio by market cap and sectors
Up to 15% of the portfolio may be invested in or into activist positions
13D and 13G filings

Board seats
Strategic alternatives
Long-term strategy is tax efficient

40-50 Companies

Portfolio Size

Approximately 40-50 positions
No position typically greater than 10% of assets

Long Term
Investment Approach

A significant percentage of capital gains are long term
Focus on disciplined investing
Low portfolio turnover
Focus on Economic and industry trends

Limited Leverage

Long exposure typically not to exceed 120%
Margin not to exceed 20%

Pricing Benchmarks

Determination of trading entry and exit points
Evaluation of price and trading history
Replacement value calculations
Comparisons to peers and sector averages

Strategy

We will utilize activism by engaging with Management/Board to accelerate a company's catalyst(s), if necessary.

Activism

Short-term

M&A, asset sales, special dividends, and distributions

Mid-term

Board changes and management replacements

Long-term

Capital structure optimization, share buy-back program, and change in dividend rate.

Execution

13D Filing

Publicly announce plans to improve shareholder value

Engagement Management

Issue list of specific actions to be implemented by the Board & Management.

Appeal to Shareholders

If the board and management are resistant, pursue strategic alternatives, including a proxy contest.

Initial Screening

Data Analysis to Industry Comps

Professional Network

Company directors and senior management
Legal professionals and other specialists
Industry consultants

Catalyst Identification

New management
Recapitalization
New product/service offering
Change in regulations, the world, Technology
Shift in market sentiment

Fundamentals

Equity and credit measures
Corporate structure metric

Risk

Market risk
Liquidity
Short interest
Event risk

Traditional Tools

Fundamental Analysis

Operating performance
Asset utilization
Capital structure
Solvency and liquidity

Market Comp Analysis

Competitive analysis

Governance Analysis

Management effectiveness
Board structure

Executive Assessment

If we engage, impact on securities price
If we invest, exit scenarios

Passive Analysis

Risk Management

Portfolio Review

Portfolio will be managed by the portfolio manager
Real-time position monitoring
Daily position review

Weekly and as-needed portfolio review meetings

Volatility

Statistical simulations
Value at Risk analysis and other statistical sampling

Diversification

No sector greater than 35% of portfolio
Focus on: technology and telecom, healthcare services, energy services,
natural resources, and business services, consumer retail
We invest in large caps to micro caps
Primarly invest in USA companies

Business Management

Experienced professionals responsible for non-investment operations
Investor access to the portfolio manager

Summary

Strong long-term historical investment performance.
Significant Chief Investment Officer and team experience.
Value creation through purchasing undervalued securities.
Activist strategies are utilized as needed.
A strategy that can outperform and generate superior returns
Proven and repeatable investment process and approach.