Why LVT will become a multi-billion dollar company, page-51

Regretfully I was not a participant in the last two days.

I also lacked the wisdom to add to our position at 24 and 25 like some of you did.

As you know we sold some shares at 34 (at a loss) and bought some back at 26 (only to watch them fall further). We have been doing this long enough to know that we will rarely buy at the bottom and sell at the top. We endeavor to be guided by fundamental value and scale our position according to conviction based on evidence.

We participated in the placing at 35 based on fundamental value. The September results were different from our model expectations The value was still there but the uncertainty had crept up and conviction down, so we scaled back our position.

After enquiry and research, we developed a thesis about product transition (greater emphasis on Wizdom) and distribution transition (building partner channel) and set ourselves some data points to monitor this. We have shared this in these threads.

The subsequent price decline reduced our position size without affecting our conviction, so, in a disciplined manner we bought back some shares to maintain our position, not increase it.

The December ARR was above our expectations and the C4 cash flow was pleasing. At this time, it is too early to tell if the transition has the positive impact we expect.

We were inclined to wait until March data before further adding to our position......BUT

at these valuation levels, in an environment where the conglomerate enterprise software companies are constantly looking for acquisitions, we expect that LVT’s management are very aware that their independence is at risk.

We suspect something has focused management’s attention on shareholder value and they are very aware that they have to integrate the acquisitions and reduce costs.

Institutional investors become aware of these efforts and draw their own conclusions.