Edison Review Highlights Positive Outlook for Lowland Investment Company Amid Market Turnaround

Edison Investment Research Limited has released a comprehensive review on Lowland Investment Company (LWI), highlighting a unique investment approach that may be set to benefit from shifting market dynamics. Lowland's strategy, marked by an unconstrained, multi-cap investment policy, allows it broad market exposure, notably outside large, conventional 'income stocks', currently at a 13% discount to NAV. This distinct approach positions LWI advantageously, especially as the underperformance of small- and mid-cap companies shows signs of reversal, which could bode well for LWI's portfolio returns.

Despite the challenges post-Brexit, which impacted domestically focused businesses including SMEs, LWI demonstrates a strong performance record, outpacing both its benchmark and sector peers over the long term. Recent times have seen a narrowing in the performance gap between larger overseas-oriented stocks and smaller, domestically focused ones, with LWI outperforming its benchmark by 3.4 percentage points in the fiscal year to September 2023. Moreover, amidst the current economic uncertainty, LWI management views the low valuations of SME companies as an opportunity, supported by a surge in acquisition activity.

LWI's commitment to delivering shareholder value is further evidenced by its dividend policy, offering a quarterly DPS 4.9% higher than the previous year, pointing to a healthy yield prospect. With an optimistic view on the long-term benefits of investing in undervalued stocks and a potential market recuperation, Lowland Investment Company presents a compelling case for investors looking for diversified exposure and strong returns.