Opalesque Solutions

Ruby Red Market Neutral Fund, LP

Ruby Red Capital Management, LLC

Company Overview

The general partner of the Fund is Ruby Red Capital Management, LLC (the “General Partner”), a Texas limited liability company. The managing member of the General Partner is John Matthew Olszewski. The General Partner serves as the General Partner of the Fund and has responsibility for all investment and trading decisions by the Fund. The General Partner is registered as an investment adviser with the Texas State Securities Board; however, this registration does not imply that the General Partner has any special investment ability.

Fund Strategy

The General Partner will primarily attempt to achieve its objective through medium- to long- term investment in companies and industries selected by fundamental analysis. The General Partner will select the securities of two companies within the same industry. One of these companies is selected as a long investment; the other is selected as a short investment. The General Partner will then purchase shares of the long position and sell short shares of the short position. Such a paired long-short position is referred to herein as a “Position.” In this manner, the Fund will take a concentrated position within an industry.

The General Partner’s fundamental analysis evaluates operational performance and current financial position of analyzed companies through study of income statements, cash flow statements, and balance sheets. In addition to fundamental analysis, valuation analysis of company equity value and stock price is also used to inform investment selection. Finally, comparative competitive analysis is used to compare current and future anticipated profitability and growth of companies; analyzed companies within the same industry are compared and evaluated based on current macroeconomic conditions and anticipated outlook for the industry within which the companies are competing against each other.
Company analysis is gauged by the comparison of companies’ relative operating income margin percentages as well as through comparative analysis between companies’ income statement line item accounts (e.g., cost of goods sold, sales, general and administrative expenses, etc.). In addition to analysis of current period operational performance, comparative analysis is also made of companies’ changes in performance over time, in order to attempt to identify companies which are either improving or deteriorating in operational efficiency.

Current financial position of companies is evaluated based on balance sheet items such as amount of debt and working capital levels. Comparative financial position of companies is also evaluated by examining changes in financial position over time, in order to identify companies which are either improving or deteriorating in financial health.

Valuation analysis is conducted in order to evaluate current company equity valuation and to compare this to both valuation of industry competitors as well as to compare a company’s current valuation with its own valuation in the past. Valuation is analyzed through ratios such as price to sales, price to book value, price to current earnings, among other valuation metrics. In addition, valuation is analyzed both by current and historical performance (i.e., trailing twelve months price to sales), as well as forward looking valuation analysis based on estimated future performance (i.e., forward price to sales ratio based on future year estimated sales).

Comparative competitive analysis of companies within the same industry is used to evaluate pairs of companies in order to identify two companies with significantly different financial position and anticipated future profitability. Additionally, valuation of company pairs is used with a goal of identifying an undervalued strong performing company which can be paired against an overvalued, comparatively weaker performing company. Within this comparative competitive analysis, macroeconomic industry factors such as industry anticipated growth rates and changes in industry input costs are evaluated.

Quick Facts

Category:
  • Relative Value » Equity Market Neutral
Inception Date: 2014-10
Monthly Performance Data:
Jun -0.69%

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