Towle & Co. is an SEC-registered investment adviser specializing in small-cap value equity investing for institutional and private clients. Founded in St. Louis, Missouri in 1981, the firm relocated to Denver, Colorado in 2020, where it is headquartered today.
Registration does not imply a certain level of skill or training.
Towle & Co. follows a contrarian, small-cap value investment philosophy the firm has practiced since 1981: buying financially sound businesses it believes the market has temporarily overlooked, through independent, bottom-up research rather than benchmark-driven decisions.
Towle & Co. primarily invests in undervalued U.S. small-cap companies—often established, tangible-economy businesses (manufacturers, energy producers, and similar) that are temporarily overlooked or misunderstood by the market relative to their underlying value.
Towle employs a systematic, security-selection process that combines disciplined valuation screening, proprietary market-validation signals and fundamental research.
Towle's process generally consists of three stages:
Valuation and quantitative screening. Towle screens the investment universe based on valuation, liquidity and other fundamental and market characteristics to identify potentially undervalued companies. Enterprise value-to-sales is an important valuation measure used by Towle. When appropriate for a particular company, industry or investment opportunity, it also considers other measures, such as earnings, price-to-book value or cash flow.
VALT™ ranking system. Towle uses its proprietary Value with Traction (“VALT™”) framework to rank investment candidates using valuation and market-validation measures, which may include price trends, momentum and downside-volatility measures. VALT™ helps prioritize and evaluate investment candidates but does not by itself determine whether a security is purchased or sold.
Fundamental analysis and portfolio review. Investment candidates are subject to fundamental analysis that may include balance-sheet strength, leverage, liquidity, operating history, industry conditions, earnings capacity, cash-flow generation, capital structure and potential business or valuation catalysts.
Towle uses its proprietary Value with Traction ("VALT") framework to rank investment candidates using valuation and market-validation measures, which may include price trends, momentum, and downside-volatility measures. VALT™ helps prioritize and evaluate investment candidates but does not by itself determine whether a security is purchased or sold. VALT™ is a screening and decision input, not a guarantee of effectiveness or performance.
Statistically cheap stocks can stay cheap for a long time, or be cheap for a structural reason rather than a temporary one—often called a "value trap." VALT™ pairs Towle's long-standing valuation discipline with a market-based signal—price trends, momentum, and downside-volatility measures—intended to help distinguish companies showing signs of improving fundamentals from those that are cheap without a catalyst. Towle frames VALT™ as a refinement to how it implements its process, not a change in philosophy: valuation remains the anchor.
Towle & Co. has managed small-cap value equities using a disciplined, valuation-driven process since 1981. VALT™ was introduced as a refinement to that process—tested starting in 2024 and used in live investment decisions beginning in late summer 2025.
The Small-Cap Value strategy is available through the Towle Small-Cap Value ETF and separately managed accounts.
Towle & Co.'s differentiation comes down to a few concrete things: disciplined, small-cap value investing since 1981; meaningful personal investment by Towle employees alongside client capital; VALT™, Towle's proprietary measure that pairs valuation with market-based traction to refine security selection; concentrated, benchmark-independent portfolios built from independent, bottom-up research; and direct, high-touch access to the investment team rather than a large, bureaucratic organization.
Market‑based signals, including those used in VALT™, have limitations. No investment strategy can eliminate the risk of loss, and our process does not guarantee better outcomes.