
Public Equity
Pivotal’s public equity strategy is a long-only, value-oriented approach seeking stocks that are underappreciated and underpriced. We are not constrained by sector, size, or location and seek businesses that possess the following characteristics:
Economic Moats/Competitive Advantages
Companies that dominate a specific niche or industry through network effects, intangibles, switching costs, or economies of scale
Higher returns on invested capital relative to peers and on an absolute basis
Free Cash Flow Generation/Growth
Companies that generate free cash flow with a path towards growing that free cash flow stream in the future
Companies that may not generate free cash flow today with a clear path towards future free cash flow generation
Downside Protection
Companies that possess a substantial margin of safety
Asymmetry
Companies trading at levels where we believe the stock’s upside return potential significantly outweighs potential downside scenarios
Management
Companies run by trustworthy management teams that have demonstrated high-quality strategic, operational, and capital allocation decision making abilities
Companies where management is aligned with long-term investors and focused on long-term value creation