Lowland Investment Company: Seeking Opportunities In Unloved UK Stocks
Edison | Jun 27, 2018 01:30AM ET
Lowland Investment Co (LON:LWI) invests for income and capital growth in a diversified portfolio of mainly UK stocks of all sizes, from high-risk early-stage intellectual property plays to household-name FTSE 100 banks. With the overriding theme being that managers James Henderson and Laura Foll believe their current share price does not reflect the value of the business. The managers have been finding opportunities in stocks that are largely exposed to the domestic market, an area that has been very out of favour with investors, who are preoccupied with low wage growth, higher inflation and the potential impact of Brexit negotiations. This has arguably led to a degree of recent underperformance and discount widening, but LWI’s impressive track record of c 12.5% annualised share price and NAV total returns over Henderson’s 28-year tenure remains intact.
Investment strategy: Focus on value and recovery
Managers James Henderson and Laura Foll aim to hold a diversified portfolio of mainly UK companies, with typically 100+ stocks chosen from across the market capitalisation spectrum. They favour value and recovery situations and have tended to have a bias towards smaller and mid-cap companies, although the FTSE 100 weighting is above LWI’s neutral level of one-third of assets. The managers will only buy companies they believe have real sales and earnings growth potential, to avoid ‘value traps’ that look cheap but have poor recovery prospects.
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