VALUE: After Hours (S07 E24): Focus on Cash from Operations, Not EBITDA

During their recent episode, Taylor, Carlisle, and Jim and Abigail Zimmerman discussed Focus on Cash from Operations, Not EBITDA. Here’s an excerpt from the episode:

Abigail: Growth companies at value prices. Yeah, so, we run Lowell Capital. We’re a family run investment firm, where we manage our own capital alongside a group of long-term partners who are aligned with our strategy and approach. We primarily focus on small-cap and micro-cap companies that are under followed, cash generative and built to last with, what we call, Fort Knox balance sheets and high returns on capital.

I would say one thing that differentiates us is just how much emphasis we put on cash from operations in the businesses that we look at. So, not EBITDA, but actual cash coming through the door, which we view as the lifeblood of a business.

After that filter, we like to evaluate companies as if we’re buying the whole business. And that really shifts our mindset more to an owner mentality, and helps us assess the durability and whether this is something we would want to own for many years. So, that discipline is really core to how we invest. Our goal is ultimately to take intelligent risks, where the odds are clearly in our favor.

You can find out more about the VALUE: After Hours Podcast here – VALUE: After Hours Podcast. You can also listen to the podcast on your favorite podcast platforms here:

VALUE: After Hours (S07 E24): Focus on Cash from Operations, Not EBITDA

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