Little Square Capital

Little Square Capital

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Research Disclosures

Our research disclosures reveal a commitment to ensuring and maintaining confidence in the integrity and credibility of all our services. It is the policy of Little Square Capital Limited not to make recommendations on companies for which it acts in an advisory capacity. 

Equity research plays a vital role in providing investors with insights into the financial health, competitive positioning, and future prospects of companies. 

Our research is sponsored, and while it does not include buy, hold, or sell recommendations, but rather seek to offer valuable insights without explicit investment advice. This adapted process involves a comprehensive assessment of company performance, competitive analysis, risk evaluation, governance scrutiny, and integration of sustainability factors in drawing up a rating of individual issuers.

Non-Independent Research Disclosures

Our research disclosures are made under the regulatory framework established by ESMA (European Securities and Markets Authority) in Europe, particularly under the Markets in Financial Instruments Directive II (MiFID II) and the Market Abuse Regulation (MAR). In the UK, research disclosures are governed by the Financial Services and Markets Act 2000 (FSMA), which includes regulations such as the Conduct of Business Sourcebook (COBS) and the Financial Promotion Order 2005 (FPO).

Our research reports are produced in accordance with these regulations and COBS12.2. and are intended solely for professional investors. Our research is commissioned and therefore not independent. The information is intended solely for informational purposes and does not constitute investment advice or an investment recommendation. The information is not intended to be a view on the present or future value or price of any investment, and investors should form their own view in relation to any proposed investment.

Any information that may resemble “investment research” on this website does not comply with standards for independent investment research. Consequently, it is classified as marketing communication. Such material is sanctioned under part IV article 19 of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (referred to as the “FPO”), duly approved by Little Square for dissemination solely within the United Kingdom to investment professionals, as defined in article 19(5) of the FPO.

What is the market abuse regulation for Investment Research?

Any published investment recommendation has elements that present a Conflict of Interest. To enhance the integrity of financial markets, European regulators created a uniform framework to regulate “investment recommendations”. In Europe and the UK, market abuse is defined and regulated under the Market Abuse Regulation (MAR) and the Financial Services and Markets Act 2000 (FSMA), respectively.

Key components of market abuse:

  • Insider Dealing: Trading financial instruments based on non-public, material information that could significantly affect their price. This includes both buying and selling securities while possessing insider information.
  • Market Manipulation: Engaging in practices that distort the price-setting mechanism of financial instruments, such as spreading false or misleading information, engaging in wash trades, or creating artificial demand or supply.
  • Improper Disclosure of Inside Information: Disclosing inside information to unauthorised persons before it is made public, or failing to disclose inside information to the market in a timely manner.
  • Misuse of Information: Misusing confidential or privileged information for personal gain or to manipulate the market, even if it doesn’t meet the strict definition of insider dealing.

Objectives of MAR

MAR aims to safeguard market integrity, protect investors, and ensure a level playing field in financial markets. It achieves this by enhancing transparency, preventing market abuse, and promoting fair and orderly trading practices.

RELEVANT DATES AND TIMES

Any ratings are finalised at the time stamp indicated in the communication. While provisions may exist for annual updates, each update would warrant a separate full analysis, treating it as a distinct communication. In research notes where a Fair Value price or range is provided, it represents the theoretical outcome derived from analysing various potential scenarios rather than a prediction of the probable share price. It’s important to note that this price or range is only applicable as of the date indicated in the communication. The validity of the pertinent price holds solely on the date of its dissemination, unless explicitly specified otherwise within its contents.

BASIS OF ASSESSMENT, METHODOLOGY, AND INFORMATION ON PROPRIETARY MODELS

Instead of explicit investment recommendations, Little Square Capital employs a rating system to evaluate the overall appeal of a company’s stock. This rating framework encompasses a diverse array of factors aimed at providing investors with a comprehensive assessment of the company’s investment potential.

  • Financial Performance: The evaluation of financial performance involves an in-depth analysis of the company’s income statement, balance sheet, and cash flow statement. Metrics such as revenue growth, profitability margins, efficiency ratios, and liquidity indicators are scrutinised to gauge the company’s financial health and operational efficiency.

  • Competitive Positioning: Assessing the company’s competitive positioning entails a thorough examination of its market share, product differentiation, brand strength, and innovation capabilities. Comparative analysis with industry peers helps identify competitive advantages or disadvantages that could impact long-term profitability and growth prospects.

  • Business Risks: A comprehensive analysis of business risks involves identifying and assessing various factors that could pose threats to the company’s operations and financial performance. This includes industry-specific risks, macroeconomic trends, regulatory environments, geopolitical factors, and supply chain vulnerabilities. Understanding and mitigating these risks are crucial for safeguarding shareholder value.

  • Governance Practices: Governance practices encompass the company’s corporate governance structure, board composition, executive compensation policies, shareholder rights, and transparency in financial reporting. Strong governance practices promote accountability, integrity, and ethical conduct, which are essential for building investor trust and minimising governance-related risks.

  • Sustainability Performance: Sustainability considerations are increasingly important for investors seeking positive social outcomes and responsible investment opportunities. Sustainability performance assessment prioritises investments that demonstrate a commitment to long-term sustainability and responsible business practices to mitigate risks, enhance reputation, and create long-term value for stakeholders.

Our Analysts

At Little Square Capital, we take pride in the expertise and dedication of our analyst team. Our analyst team comprises seasoned professionals with extensive experience in various sectors of the financial markets. Our analysts play a crucial role in conducting thorough research, analysing market trends, and providing valuable insights to our clients.

From equity research to sustainability analysis, our team members bring a wealth of knowledge and expertise to their respective areas of focus. Throughout the research process, our analysts remain committed to objectivity and impartiality. They strive to present balanced perspectives and avoid biases that may influence their analysis. By adhering to high standards of professionalism and integrity, our analysts uphold the trust and confidence of our clients.

Suitability RESEARCH DisclosureS

Little Square Capital operates within the regulatory framework of the Markets in Financial Instruments Directive (MiFID), emphasising transparency and fairness in financial services. Our commitment to regulatory compliance and client protection means that we do not provide personalised investment advice or make recommendations, whether explicit or implicit, in our research.

Little Square Capital offers equity research services that provide general information, analysis, and insights into investments. However, we do not offer individualised investment advice tailored to the specific circumstances or objectives of individual clients.

Alternative investments often come with high fees and expenses that can significantly reduce investment returns. These fees may include management fees, performance fees, and other expenses associated with specialised investment strategies. Investors should carefully evaluate the fee structure of alternative investments and consider their impact on overall returns.

While we strive to provide accurate and relevant information, we cannot guarantee the suitability or appropriateness of any investment strategy or product for any particular client. Each client’s financial situation, investment goals, risk tolerance, and other factors may vary, and therefore, investment decisions should be made based on individual circumstances and preferences.

Furthermore, you should satisfy yourself before reading it that you are permitted to receive marketing material concerning investments from Little Square Capital in accordance with relevant legislation and regulations.

Regulatory Research Disclosures

At Little Square Capital, we adhere to a policy of not covering companies for which we provide advisory services. In such instances, our research reports will include research disclosures that denote these companies as “House Stock.”

Little Square Markets has provided investment services and/or ancillary services to the following companies and received compensation for it during the past 12 months:

Forte-Medical, Fury Gold Mines, Signapps International, Sustainable Pipeline Systems, Tier One Silver, TorQ Resources.

Employees’ shareholdings in companies

Share positions include people involved in the production of equity research, including people that could reasonably be expected to have access to it before distribution.

Apple Inc, Berkshire Hathaway, Canadian Natural  Resources, MR Price Group Ltd, RIT Capital, Schindler Holding AG

Little Square Capital ownership in companies

Share positions as part of the Little Square Capital Group (including subsidiaries, affiliates and holding companies).

Associated British Foods, Britvic, Croda, Portmeirion, Reckitt, WH Smith

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