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.
Who We Target
At Galloway Capital Partners, we focus our investment strategy on publicly traded securities, particularly those that are undervalued and trading at significant discounts to their intrinsic value. We target stocks that are priced below their all-time highs, creating opportunities for substantial gains.
The businesses we seek to invest in have specific characteristics: they are understandable in terms of their operations, possess significant growth potential, and are typically under-covered by analysts, giving us a unique advantage in identifying value that the broader market may overlook. This combination of undervaluation and growth potential allows us to capture outsized returns for our investors.
Analysis
Analysis follows a value-driven approach that includes rigorous financial and technical criteria screening. We perform financial reviews and rankings to assess the investment potential of each opportunity. This is followed by portfolio analysis and construction, ensuring a balanced and strategic selection of investments. We then focus on stock selection and trading to maximize returns.
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On the qualitative side, we engage directly with companies by meeting with management, evaluating board members, and assessing the shareholder base. We also thoroughly review and analyze management's business plans to ensure alignment with our value-driven investment strategy. This dual approach—blending quantitative and qualitative insights—helps us identify high-potential opportunities and drive superior returns.
How We Research
Our research process combines key sources to ensure a thorough understanding of each investment opportunity. We rely on SEC filings and publicly available information for foundational data. We further enhance our insights through direct company contacts, industry discussions, and consultations with buy-side and sell-side analysts, ensuring a well-rounded view of the market and potential investments.​
Portfolio Structure
The portfolio is structured for both flexibility and performance. We typically hold investments for 12-36 months, ensuring a balance between short-term gains and long-term growth. The portfolio is diversified across market capitalizations and sectors, providing broad exposure to opportunities, especially focusing on: technology and telecom, healthcare services, energy services,natural resources, and business services, consumer retail
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Up to 15% of the portfolio may be allocated to activist positions, where we take an active role in shaping company strategy. We also engage through 13D and 13G filings to disclose significant stakes and gain board seats when necessary to influence decisions.
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We explore strategic alternatives, such as mergers, acquisitions, and restructuring, to unlock additional value. Finally, our long-term strategy is designed to be tax efficient, ensuring that returns are optimized for our investors.
Limited Leverage
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Long exposure typically not to exceed 120%
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Margin not to exceed 20%
Long Term Investment
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A significant percentage of capital gains are long term
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Focus on disciplined investing
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Low portfolio turnover
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Focus on Economic and industry trends
Portfolio Size
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Approximately 40-50 positions
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No position typically greater than 10% of assets
Pricing Benchmarks
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Determination of trading entry and exit points
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Evaluation of price and trading history
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Replacement value calculations
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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.
Execution
13D Filing
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Publicly announce plans to improve shareholder value
Engage with Management
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Issue list of specific actions to be implemented by the Board & Management.
Appeal to Shareholders
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If the board and management are resistant, pursue strategic alternatives, including a proxy contest.
Friendly Activism
Short-term
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M&A, asset sales, special dividends, and distributions
Mid-term
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Board changes and management replacements
Long-term
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Capital structure optimization, share buy-back program, and change in dividend rate.
Initial Screening
Professional Network
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Company directors and senior management
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Legal professionals and other specialists
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Industry consultants​
Catalyst Identification
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New management
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Recapitalization
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New product/service offering
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Change in regulations, the world, Technology
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Shift in market sentiment
Risk
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Market risk
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Liquidity
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Short interest
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Event risk
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Fundamentals
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Equity and credit measures
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Corporate structure metric
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Analysis
Fundamental Analysis
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Operating performance
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Asset utilization
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Capital structure
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Solvency and liquidity​
Governance Analysis
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Management effectiveness
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Board structure
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Market Comp Analysis
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Competitive analysis
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Executive Assessment
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If we engage, impact on securities price
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If we invest, exit scenarios
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Passive Analysis & Risk Management
Portfolio Review
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Portfolio will be managed by the portfolio manager
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Real-time position monitoring
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Daily position review
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Weekly and as-needed portfolio review meetings
Diversification
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No sector greater than 35% of portfolio
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Focus on diversified industries
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We invest in large caps to micro caps
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Primarly invest in USA companies
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Volatility
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Statistical simulations
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Value at Risk analysis and other statistical sampling
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Business Management
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Experienced professionals responsible for non-investment operations
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Investor access to the portfolio manager