GALLOWAY
CAPITAL PARTNERS
Deep Value Investors
We Believe In Value

Executive Summary

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.

WE ARE OUTPERFORMING

About

MAN vs MACHINE

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!

Galloway Capital Partners Man against Machine

Conventional Portfolio Management and 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 Investments

Galloway Logos

Our Process

Target Universe Icon
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
Internal Research icon
70-100 Companies

Analysis

Analysis Icon
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
Portfolio Icon
40-50 Companies
Portfolio Icon

Portfolio Size

  • Approximately 40-50 positions
  • No position typically greater than 10% of assets
Pricing Benchmark Icon

Pricing Benchmarks

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

Limited Leverage

  • Long exposure typically not to exceed 120%
  • Margin not to exceed 20%
Time Icon

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

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.

Past Investments

Recent Investments by Galloway Capital Partners

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.

Contact

Bruce Galloway, Chief Investment Officer

Galloway Capital Partners, LLC
bgalloway@gallowaycap.com
 (212) 247 1339     (917) 405 4591