Lowland Investment Company in 60 seconds

Edison’s investment trust team recently published a review of Lowland Investment Company.
Lowland invests across all market caps but with a weighting to the largest companies of no more than 50% and a strong tilt towards small and mid-sized companies.

The multi-year underperformance of small and mid-sized companies weighs heavily on the trust’s own performance, and masks a strong record of successful stock selection, which merits attention.

The valuation of the UK equity market remains low, particularly compared with that in the US, and this is borne out by a high level of merger and acquisition activity. UK smaller company valuations are especially low.

The investment managers say that, while UK economy may continue to flatline, there many well-managed smaller companies, with strong balance sheets, low valuations and, as importantly, modest analyst expectations.

Investors may need to be patient for this to change. Meanwhile, Lowland yields around 5%, which is ahead of the market, and the company is buying back shares.