Headlands Capital seeks to take advantage of inefficiencies in small cap stocks by conducting deep, primary field due diligence and building a differentiated investment thesis through multiple meetings with management, competitors, suppliers and industry participants. Headlands Capital combines qualitative assessments of management ability, competitive positioning and industry growth with a proprietary, quantitative model, developing a picture for the revenue, margin and cash flow outlook for a target business over the next 3-5 years.
Headlands Capital targets businesses where the principals have developed conviction in the investment thesis, in the downside protection in the stock and in management's ability to achieve its vision for the company. Through the due diligence process, Headlands Capital also seeks to develop a relationship with management and a mutual alignment of interests around future initiatives of the portfolio company.