Meridian Funds

Meridian Funds

Last Update: 08-31-2013

Number of Stocks: 149
Number of New Stocks: 15

Total Value: $2,681 Mil
Q/Q Turnover: 13%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Meridian Funds Watch

  • Is This Dip a Buying Opportunity for Pall Corporation?

    On Feb. 20, Pall Corporation (PLL) shares hit a new high. But just four days later, the company lowered its guidance, and the share price began falling.


    It wasn’t that the company expected its earnings to fall, but rather it expected the rate of growth to slow. It estimated its earnings for fiscal 2015 (ending on July 31) would grow by only 6% to 12%. Nevertheless, as the following chart of the share price shows, that led to a loss of confidence that continues:

      


  • Weekly CEO Buys Highlight: CLR, KMI, TEP, HLX, MRO

    According to GuruFocus Insider Data, these are the largest CEO buys during the past week. The overall trend of CEOs is illustrated in the chart below:



    Continental Resources Inc (CLR): CEO & Chairman, 10% Owner Harold Hamm Bought 139,621 Shares

      


  • Meridian Growth Fund Portfolio Performance 2014

    According to the Chinese lunar calendar, 2014 was the year of the horse, and the stock market certainly cooperated by galloping higher. Equities, both large and small, continued to set record highs on the heels of an improving economy and company fundamentals.


    Against this backdrop, we are pleased to report that the Meridian Growth Fund Legacy Class shares returned 7.62% for the six-month period ending December 31, 2014, outperforming its benchmark, the Russell 2500® Growth Index, which returned 2.97%.

      


  • Meridian Funds Annual Shareholder Letter 2014

    Semi-Annual Report, 12/31/2014 Dear Fellow Shareholder, During the six months ending December 31, 2014, the S&P 500® Index and the Russell 2500® Index had total returns of 6.12% and 1.06%, respectively. Continued moderate growth in the U.S. supported equities, while the rapid decline in oil prices had a negative impact on the energy sector and drove an overall increase in spreads and volatility of the high-yield fixed income market.


    While market signals are not always correct and can change on a whim, a lot can be gleaned by listening to what they are saying. Low and sometimes negative interest rates as well as ongoing declines in commodity prices within developed markets act as signals to prepare for economic weakness and a potentially deflationary environment. While these concerns have certainly characterized the past six months, the magnitude of the decline in oil prices has the potential to change the outlook during 2015.

      


  • Meridian Funds Comments on Del Frisco's Restaurant Group Inc

    Del Frisco’s Restaurant Group (DFRG) is a fine dining company that operates 45 steakhouses across three brands. We initiated our position when earnings were pressured by underperformance in the Sullivan’s Steakhouse brand and the investment in a new growth brand, Del Frisco’s Grille. We like the fact that the company overall has outperformed the overall restaurant sector the past few years. The company underperformed in the quarter due to delays in new store openings and some location-specific issues that hurt revenue growth. We continue to believe that Del Frisco’s offers an appealing product with high unit growth potential and have added to our position on the recent price weakness.

    From Meridian Funds (Trades, Portfolio)’ Meridian Contrarian Fund 3Q 2014 Commentary.  


  • Meridian Funds Comments on Endologix Inc

    Endologix (ELGX) is a medical device company with products that treat aortic abdominal aneurisms (AAA). Recently the company experienced a decline in sales growth after the conclusion of a clinical trial rollout. We believed the revenue issue was temporary and were very excited about a new product called Nellix that has the potential to more than double Endologix’s market share in AAA procedures. During the quarter, share performance disappointed after the company disclosed that sales would again miss expectations, this time due to an intensifying competitive environment. While management outlined an aggressive response, including product enhancements intended to further improve upon the lowest complication rate in the AAA industry, we have reduced our position until we can gain greater clarity on how effective these efforts will be in the market.

    From Meridian Funds (Trades, Portfolio)’ Meridian Contrarian Fund 3Q 2014 Commentary.  


  • Meridian Funds Comments on Halcon Resources Corp

    Halcon Resources (HK) is an independent, U.S.-based oil and gas exploration and production company. At the time of our investment, the stock was out of favor due to a combination of high levels of investment spending and poor drilling results at select wells. This created an opportunity to invest in the management team, which has an excellent record of finding and developing energy assets, and their ability to deliver improved exploration results and production growth. Halcon’s stock underperformed meaningfully in the quarter, reversing strong performance in the first half of 2014. As a development-stage company with a leveraged balance sheet, the company’s stock demonstrated greater volatility than the sector as a whole and declined significantly more than the price of oil. Despite short-term volatility potential, we believe the company has the ability grow reserves and production and could potentially be an acquisition target over the long term.

    From Meridian Funds (Trades, Portfolio)’ Meridian Contrarian Fund 3Q 2014 Commentary.  


  • Meridian Funds Comments on Icon PLC

    ICON (ICLR) manages clinical trials for the biotech, pharmaceutical and medical device industries. Our investment in the company materialized when earnings were pressured by an industry slowdown in clinical trials at the same time that ICON was investing in its own capacity expansion. We viewed the slowdown in demand as temporary, caused by the elimination of many duplicative drug development programs. In addition, we thought ICON’s investments in technology positioned the company to gain market share in a growing industry as pharmaceutical customers increasingly outsourced clinical trial work. Strong stock performance in the quarter was driven by revenue and margins coming in above street estimates and a positive management outlook. We continue to hold shares in ICON based on its positioning as a technology leader in the clinical trial industry and the potential to further expand operating margins

    From Meridian Funds (Trades, Portfolio)’ Meridian Contrarian Fund 3Q 2014 Commentary.  


  • Meridian Funds Comments on Chiquita Brands International Inc

    Chiquita Brands (CQB) is a global leader in bananas and the U.S. leader in packaged salads. Our original investment came after the company’s earnings declined due to market share losses in salads, tough European markets and foreign exchange losses. We believed new management had a strong history and a compelling plan to improve consistency of results and capital allocation. Chiquita stock performed well in the quarter due to a buyout offer from a Brazilian conglomerate in an attempt to trump Chiquita’s existing plans to merge with a European partner. We took advantage of the strength in the stock to reduce our position and may continue to do so.

    From Meridian Funds (Trades, Portfolio)’ Meridian Contrarian Fund 3Q 2014 Commentary.  


  • Meridian Funds Comments on ServiceMaster Global Holdings Inc

    Servicemaster Global Holdings (SERV) is a leading provider of termite and pest control services, home warranties, and other residential services. We identified the company after marketing and service missteps at its lawn care division, which was spun off earlier this year. We invested in Servicemaster because of its dominant positions in fragmented markets. The stock outperformed during the quarter due to better than expected revenue and profit growth despite a weather- weakened termite season. Upside came from pricing, market share gains and cost efficiencies. We added to our position due to the encouraging quarterly results and an outlook for steady, low double digit earnings growth achieved through continued market share gains, operating margin expansion and debt reduction.

    From Meridian Funds (Trades, Portfolio)’ Meridian Contrarian Fund 3Q 2014 Commentary.  


  • Meridian Contrarian Fund 3Q 2014 Commentary

    FUND SUMMARY


    During the third quarter of 2014, the Meridian Contrarian Fund returned -4.59%, which compares to a return of -5.35% for its benchmark, the Russell 2500 Index.

      


  • Meridian Funds Comments on Clean Harbors Inc

    Clean Harbors (CLH) underperformed during the quarter due to concerns around falling lube oil prices, exposure to the Canadian energy sector, and struggles by one of its publicly traded competitors. We believe the declines in lube oil prices are a normal seasonal occurrence that may reverse in future periods. We also believe that Clean Harbors is well positioned to execute through a period of weak demand from its energy customers and that the struggles felt by its competitors are unlikely to impact Clean Harbors. We have maintained our position through this period of volatility and continue to believe that many of the company’s assets are irreplaceable.

    From Meridian Funds (Trades, Portfolio)’ Meridian Growth Fund 3Q 2014 Commentary.  


  • Meridian Funds Comments on CHC Group Ltd

    CHC Group (HELI) has suffered along with the entire offshore oil services group. The company’s high financial leverage and recently announced plan to issue convertible preferred debt impacted the share price negatively in the quarter. We trimmed the position as we have become less comfortable with the company’s absolute leverage and the dilutive nature of the capital raise.

    From Meridian Funds (Trades, Portfolio)’ Meridian Growth Fund 3Q 2014 Commentary.  


  • Meridian Funds Comments on RigNet Inc

    RigNet (RNET) underperformed due to fears around excess supply of offshore drilling rigs. We believe the overall business is misunderstood and the impact of excess drilling rig supply will have a very small impact on RigNet’s growth prospects. The 20% organic growth rate reported by the company in Q2 is not fully appreciated by the market. As we have demonstrated with some of this quarter’s largest contributors, we are patient investors and believe the risk/reward profile from this price is very favorable. We added to our position in RigNet throughout the quarter.

    From Meridian Funds (Trades, Portfolio)’ Meridian Growth Fund 3Q 2014 Commentary.  


  • Meridian Funds Comments on Carter's Inc

    Carter’s (CRI) is a leading retailer of infant and toddler apparel. Carters’ returned 12.72% on the back of a strong Q2 earnings report, which saw bottom-line profits increase 33%. We continue to believe that the company can grow revenues at attractive rates given its low penetration in e-commerce and international markets. Due to the company’s dominant position and strategic initiatives, we believe the runway for growth remains favorable.

    From Meridian Funds (Trades, Portfolio)’ Meridian Growth Fund 3Q 2014 Commentary.  


  • Meridian Funds Comments on Dresser-Rand Group Inc

    Dresser-Rand (DRC) was the target of an acquisition by Siemens. Dresser-Rand provides highly engineered, mission-critical equipment to the energy sector. Despite recent underperformance from a new unit business, our patience was rewarded as Siemens saw the value in the recurring aftermarket profit stream and new product innovations. Given limited upside from current levels, we will likely use Dresser-Rand as a source of cash for better ideas until the deal closes in 2015.

    From Meridian Funds (Trades, Portfolio)’ Meridian Growth Fund 3Q 2014 Commentary.  


  • Meridian Funds Comments on Cimpress NV

    VistaPrint (CMPR) offers online marketing products and services to small businesses. The company was a large negative contributor to performance earlier this year, when its brand repositioning efforts were felt most severely. We added to the position during this weakness, given we felt the revenue headwinds were temporary, and management’s actions potentially improved the long-term characteristics of the business. Our patience paid off during the third quarter, as earnings came in more than 40% above consensus, which drove the stock higher. We trimmed our position in VistaPrint as the stock rose significantly from the low point in July to quarter end.

    From Meridian Funds (Trades, Portfolio)’ Meridian Growth Fund 3Q 2014 Commentary.  


  • Meridian Growth Fund 3Q 2014 Commentary

    Overall, small and mid cap stocks were challenged this quarter, with these stocks exhibiting increased volatility. We were able to take advantage of this volatility, which helped the Meridian Growth Fund (the “Fund”) approach our target of 100% upside participation in market rallies and only 80% downside participation during pullbacks. We believe this ability to protect capital in market pullbacks, yet perform in-line during up markets, is the best way to compound investor capital over time.


    From the high on March 4 in the Russell 2500 Growth Index (the “Index”) until the bottom on April 11, the Fund captured only 70% of the market’s pullback. We were able to selectively buy stocks during this period that were previously too expensive to own. From the Russell 2500 Growth Index’s low on April 11 until the September 2 peak, the Fund captured 103% of the upside move.

      


  • Stericycle: A Triple Screener Hit

    Just a generation ago, our collective attitude to hazardous waste might have been described as lackadaisical, at best. Syringes, bio-wastes and other waste products from the health care system often went into regular waste streams with little concern.


    Since then, however, that collective attitude has turned to vigilant, even hyper-vigilance sometime. We no longer accept anything but the utmost of care when managing and disposing of those wastes. It’s been sea change, and one that’s been driven by public awareness, legislation, and litigation.

      


  • Quickly Gain A Wealth Of Information From The GuruFocus Summary Page (Using Apple As An Example)

    When investing in a company, it is not only necessary to know about the company itself, but also how the stock is valued. Viewing a company through its summary page at GuruFocus provides a wealth of information to help understand its financial strength, profitability, growth and valuation, and see how the gurus and insiders are trading the stock. The features of the summary page can help you decide in minutes if not seconds whether or not to further investigate the stock for an investment opportunity. The summary page at GuruFocus should be your first destination when researching a particular stock.


    Using Apple (AAPL) as an example, towards the top of the page it can be seen that Apple is a very predictable company with its Business Predictability score of 4.5/5. By moving the mouse over the “question mark” next to the rating, a popup will appear giving more information about stocks with the same rating. Stocks with a 4.5/5 rating have gained 10.6 percent on average while back-testing for the past 10 years. Only 10 percent of the stocks lost money if held for 10 years.

      


  • Meridian Funds Comments on Wolverine World Wide

    Wolverine World Wide (WWW) manufactures and markets branded footwear globally. The stock declined during the quarter as investors wait for a turnaround in one of their key brands, Sperry. We continue to be attracted to the company’s strong portfolio of brands, the long- term international growth opportunity and the strong management team. We trimmed the stock during the quarter; however, we still maintain a large position in the stock.

    From Meridian Funds (Trades, Portfolio)’ Meridian Growth Fund Second Quarter 2014 Commentary.  


  • Meridian Funds Comments on The Advisory Board Co

    The Advisory Board Company (ABCO) provides best practice research and analysis to the health care industry. The stock declined during the quarter when the company announced earnings that included higher than expected expense growth. We believe these investments are good uses of capital that will enhance the business model and long-term growth profile of the company. We continue to see a strong need for the company’s services and held our position during the quarter.

    From Meridian Funds (Trades, Portfolio)’ Meridian Growth Fund Second Quarter 2014 Commentary.  


  • Meridian Funds Comments on Clean Harbors

    Clean Harbors (CLH) provides a variety of environmental remediation and industrial waste management services. After being a laggard in the first quarter, during which time we also added to the position, the stock reacted strongly to both stabilizing business trends and the announcement that an activist investor was involved in the security. We remain attracted to the company’s large barriers to entry and pricing power in their core businesses and the recovery that we believe is on track in some of the company’s more cyclical businesses. We took advantage of the strength in the quarter to trim some of the position.

    From Meridian Funds (Trades, Portfolio)’ Meridian Growth Fund Second Quarter 2014 Commentary.  


  • Meridian Funds Comments on Prestige Brands

    Prestige Brands (PBH) is the largest independent provider of over-the-counter products in North America. Examples of their brands include Chloraseptic, Dramamine, PediaCare and Efferdent, to name a few. We added to the position during the first quarter when the stock was one of the largest detractors, selling off for short-term reasons. The company experienced a decline in items stocked at one of the company’s largest customers, but we believe this is a temporary situation and our long- term thesis remains unchanged. This proved timely as the company demonstrated stabilized results during the second quarter and announced an acquisition, which drove the stock higher. Prestige Brands has an asset-light business model that focuses exclusively on the marketing and distribution of these brands, which results in a growing, scalable and high-return business model. We continue to hold the position.

    From Meridian Funds (Trades, Portfolio)’ Meridian Growth Fund Second Quarter 2014 Commentary.  


  • Meridian Funds Comments on Polypore International Inc

    Polypore International (PPO) develops, manufactures and markets specialized membranes used in separation and filtration processes. The stock rallied strongly during the second quarter as it signed a new agreement with a customer that includes possible access to one of the world’s fastest growing electronic vehicle brands. We believe the company has substantial earnings growth potential driven by increases in capacity utilization of their lithium ion separator manufacturing facilities as electronic vehicles increase their share of total automobile production. We took advantage of the strong stock move to trim some of the position during the quarter.

    From Meridian Funds (Trades, Portfolio)’ Meridian Growth Fund Second Quarter 2014 Commentary.  


  • Meridian Growth Fund Second Quarter 2014 Commentary

    We are pleased with the Meridian Growth Fund’s (the “Fund”) outperformance during the quarter, which was driven by our discipline of using fundamental research to identify high-quality growth businesses with predictable and recurring revenues, high returns on capital and attractive risk-reward profiles. We then look to build a durable fund based on these ideas that seeks to manage downside risk in tough, turbulent markets and keeps up with the broader market in bull market environments.


    We believe the period from the market’s peak early in March is a good demonstration of this. From the market’s peak in early March, the fund captured just 71% of the market’s downside move, falling 6.5%* as compared to 9.2% for the Russell 2500 Growth to the April low. From that low point the fund was then able to capture 90% of the upside going into the end of the quarter, rising 8.0%* versus the index’s gain of 9.0%. We believe this focus on going down less in down markets can result in long-term outperformance due to the power of compounding. By maintaining discipline and a long-term focus, we welcome increased volatility in the market and believe these short-term gyrations can create opportunities to invest capital.

      


  • Meridian Funds Comments on Ubiquiti Networks

    Ubiquiti Networks (UBNT) designs and manufactures wireless broadband infrastructure equipment and other communications. Ubiquiti initially came to our attention in early 2013 after suffering declines in earnings. While being optimistic about overall market demand, our research led us to conclude that the problems facing the company were temporary and we invested in the stock. Management executed on the turnaround, which drove both revenue and earnings growth. As a result the stock has more than doubled from our initial purchase price.

    From Meridian Funds (Trades, Portfolio)’ Meridian Contrarian Fund Second Quarter Commentary.  


  • Meridian Funds Comments on EOG Resources

    Long-term holding EOG Resources (EOG) is a large, diversified oil and gas exploration and production company. The stock fell out of favor when the company made poorly timed investments to expand natural gas production just prior to a precipitous drop in natural gas prices. We saw this as an opportunity because the company possessed both the management acumen and attractive resource base to efficiently pivot production away from natural gas to oil. EOG continues to execute this strategy with better than expected oil production and higher oil prices driving strong stock performance during the fiscal year.We maintain our position in the stock.

    From Meridian Funds (Trades, Portfolio)’ Meridian Contrarian Fund Second Quarter Commentary.  


  • Meridian Funds Comments on CHC Group

    CHC Group (HELI) is a service provider to the offshore oil and gas industry. The stock declined during the period as the company’s growth trajectory did not exceed investor expectations. We added to the position during the period as we remain confident it will achieve our long-term growth and cash-flow targets. The overall industry continues to show strong growth, and the company’s own business is improving as it restructures contracts at higher prices with longer terms.

    From Meridian Funds (Trades, Portfolio)’ Meridian Growth Fund Annual Review.  


  • Meridian Funds Comments on Sally Beauty Holdings

    Sally Beauty Holdings (SBH) distributes and retails beauty products. During the period, the stock declined due to the impact of weather and some overall weakness in consumer spending. We have been adding to the position as we believe the company is well positioned to grow domestically, expand internationally and continue buying back stock, which should drive strong earnings growth for the long term.

    From Meridian Funds (Trades, Portfolio)’ Meridian Growth Fund Annual Review.  


  • Meridian Funds Comments on VistaPrint

    VistaPrint (VPRT) declined during the period due to a business model transition that has weighed negatively on short-term financial performance. We continue to believe that after the transition the company will have lower customer churn, higher customer duration, higher average selling prices and higher reorder rates. All of these combined should drive high operating leverage and substantial earnings growth. We have been adding to the position on weakness.

    From Meridian Funds (Trades, Portfolio)’ Meridian Growth Fund Annual Review.  


  • Meridian Funds Comments on Cadence Design Systems

    Cadence Design Systems (CDNS) provides software technology, design and consulting services and technology. Its primary product is electronic design automation software for the semiconductor industry. The stock rose as the company and industry transition began to show in its operating results. Specifically, industry consolidation has resulted in an improvement in pricing power. Cadence has successfully transitioned to a recurring revenue model, and we expect it to begin deploying its capital via stock repurchases. We trimmed the position modestly during the quarter.

    From Meridian Funds (Trades, Portfolio)’ Meridian Growth Fund Annual Review.  


  • Meridian Funds Comments on Sensata Technologies

    Sensata Technologies (ST) develops, manufactures and sells sensors and controls. We are attracted to the company’s large growth opportunity, which is driven by increased sensor penetration in industries such as automobiles and general industrial opportunities. We find Sensata’s business model to be attractive given the stability of its revenues, strong operating leverage and excellent management team. During the period, the company benefited from a rebound in European automobile sales and deployed capital in several small accretive acquisitions. We have been trimming the position modestly as the stock approaches our price target.

    From Meridian Funds (Trades, Portfolio)’ Meridian Growth Fund Annual Review.  


  • Meridian Funds Comments on Trimble Navigation

    Trimble Navigation (TRMB) provides location-based solutions to its customers that enhance their productivity and profitability. The recovery in construction end markets and continued strong demand from the farm economy resulted in strong overall financial results for the company and a strong stock price. We trimmed the position as it began to exceed the upper end of the market cap range that we invest in.

    From Meridian Funds (Trades, Portfolio)’ Meridian Growth Fund Annual Review.  


  • Meridian Contrarian Fund Second Quarter Commentary

    The Meridian Contrarian Fund-Legacy Shares returned 23.31% during the twelve-month period ending June 30, 2014, which compares to the primary benchmark, the Russell 2500 Index, which returned 25.58%. The strategy’s secondary benchmark, the S&P 500 Index, returned 24.61%.


    The Meridian Contrarian Fund’s investment strategy remains unchanged. We continue to seek out-of-favor companies that we believe, despite suffering temporary problems, have good long-term prospects for earnings growth supported by defensible positions in their industries, attractive return on capital and strong or improving balance sheets. Over the long term we believe this contrarian investing process can outperform the market.

      


  • Meridian Growth Fund Annual Annual Review

    On September 5, 2013, we began managing the Meridian Growth Fund. It is our distinct honor to take the helm of this venerable fund, which was founded by Richard Aster nearly 30 years ago. Through rigorous fundamental research, disciplined portfolio construction, and a focus on managing risk before reward, we hope to expand upon Meridian Growth Fund’s legacy. We will use the same process and philosophy that served us well managing another mutual fund for 7 years. Namely, our investment philosophy is centered on four key tenets:


    1. Employ fundamental research to identify high-quality growth businesses with predictable and recurring revenues, high returns on invested capital, and attractive risk-reward profiles.

      


  • Meridian Funds Annual Shareholder Letter

    Dear Shareholder,


    During the year ending June 30, 2014, the S&P 500 and the Russell 2500 (small and medium sized companies) returned over 24.6% and 25.5%, respectively. Continued accommodative Fed policy along with improvements in housing, employment and manufacturing were all supportive macro-economic factors that drove an overall increase in earnings and valuation for the indices.

      


  • Top Insider Buys Highlight: Core Laboratories NV

    Executive VP & CFO of Core Laboratories NV (CLB) Richard Bergmark bought 7,000 shares on July 28 at an average price of $147.31. The total transaction amount was $1,031,170.


    Core Laboratories is a Netherlands limited liability company established in 1936, engaged in providing proprietary and patented reservoir description, production enhancement and reservoir management services to the oil and gas industry. Core Laboratories has a market cap of $6.67 billion; its shares were traded at around $150.25 with a P/E ratio of 27.80 and P/S ratio of 6.30. The dividend yield of Core Laboratories stocks is 1.10%. Core Laboratories Nv had an annual average earnings growth of 22.50% over the past 10 years. GuruFocus rated Core Laboratories the business predictability rank of 3-star.

      


  • Meridian Funds Comments on Exact Sciences Corp

    Exact Sciences Corp. (EXAS) also had negative returns during the period, which created a drag on overall Fund performance. Exact Sciences is an early stage diagnostic company with a test for early detection of colorectal cancers. Upon receipt of the U.S. Food and Drug Administration’s approval, we believe that Exact Sciences’s Cologuard test will help revolutionize colorectal screening and increase overall compliance rates with clinical guidelines. We think that the large market, combined with attractive unit economics, should drive an improvement in shareholder value.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Exa Corp

    Exa Corp. (EXA) provides software for simulation driven product design. The stock experienced erosion in its price during the period, which made it the second largest detractor to performance. We view the company as being an open-ended growth opportunity as software based simulation benefits from prototyping in transportation markets. Simulation reduces the need for expensive prototypes, increases automation, and allows for faster turnaround times, which ultimately result in customer savings. Exa signs annual consumption-based licenses with customers, which we believe create predictable revenue streams with low volatility.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on SciQuest Inc

    SciQuest, Inc. (SQI) also was the Fund’s largest detractor, experiencing a stock price decline over the period. We believe that this negative performance was due to shareholders taking profits at the end of the year after the stock returned nearly 80% for the 12-month period ending December 31, 2013. SciQuest is a software company that helps its customers connect with their suppliers and lower procurement costs. The company uses an on-demand model, which results in a high percentage of recurring revenues. We believe that this is a $4 billion potential market, which provides a long runway for growth considering SciQuest currently has less than $100 million in annual revenues.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Rignet Inc

    Rignet, Inc. (RNET) also contributed to the positive performance of the Fund during the period. RigNet is the largest provider of communications infrastructure to remote locations for the oil and gas industry. We believe the company has a strong competitive advantage as a result of its scale, quality of service, and customer relationships. RigNet is positioned to benefit from an increase in oil and gas production in more remote locations, especially deepwater projects.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Titan Machinery Inc

    Titan Machinery, Inc. (TITN) was a top contributor to the Fund, with its stock price generating robust returns for the two-week period ending December 31, 2013. Titan Machinery is the largest agricultural dealer for Case New Holland with solid market positions in the western U.S. From a growth perspective, we believe that the company is well-positioned to benefit from increased global food demand, a rebound in commercial construction activity, and further acquisition opportunities. We also consider the company’s business model to be solid, with a majority of profits coming from its more stable parts and service aftermarket business. We believe these characteristics can drive further improvements in shareholder value.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on National Research Corp

    National Research Corp. (NRCIB) experienced strong gains during the two-week period ending December 31, 2013. The company provides performance measurement services to the healthcare industry to help providers and payers measure outcomes. We believe that National Research is well positioned for the evolving healthcare landscape and has a strong business model characterized by recurring revenues, high margins, and returns on equity in excess of 20%. Additionally, the A shares owned by the Fund closed the year at a 45.8% discount to the B shares; we expect this valuation discrepancy to narrow over time.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Cisco Systems Inc

    Cisco Systems, Inc. (CSCO) also generated losses for the Fund during the period as earnings expectations were recently cut due to weakness in emerging markets. We are regarding our investment in Cisco with caution, but for now we continue to hold the shares due to the attractive dividend yield and the potential for dividend growth, even with muted earnings growth, enabled by the company’s low payout ratio and strong balance sheet.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Campus Crest Communities Inc

    Campus Crest Communities, Inc. (CCG) is a real estate investment trust (“REIT”) specializing in student housing in second tier university markets. Our investment suffered as we underestimated the supply growth outlook for this sector and the resulting pressure on results and investor sentiment. We sold the stock at a loss during the period.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Apple Inc

    Apple, Inc. (AAPL) also generated solid returns for the Fund during the period. Due to negative investor sentiment as earnings growth slowed, we were able to invest in the company at an attractive yield. We believe Apple’s cash-rich balance sheet and low payout ratio indicates an ability to grow dividends even if earnings growth does not return to its historic rate.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Lockheed Martin Corp

    Lockheed Martin Corp. (LMT) was the second largest contributor to Fund returns during the period. The company fared well as earnings grew better than expected despite budget related pressures on the defense industry. We believe that Lockheed Martin will experience continued earnings growth, and its low payout ratio indicates a strong possibility of future dividend increases.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Tempur Sealy International Inc

    Tempur Sealy International, Inc. (TPX) is a leading mattress manufacturer. Earnings declined as the industry slowed in 2013, as compared to a very strong 2012, as competitors successfully imitated Tempur Sealy’s “memory foam” products and as the company experienced problems with a new product launch. We initially invested because we believed that the company’s acquisition of Sealy in March 2013 could drive earnings growth in a stagnant mattress market, which could be helped by using cash flow generation to pay down debt and lower interest expense. We sold the stock at a loss due to a surprise sales shortfall that led us to believe that the declines in the company’s core “memory foam” products could be worse than we anticipated and presented a longer-term challenge.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Compass Minerals International Inc

    Compass Minerals International, Inc. (CMP) is a leading producer of rock salt and specialty potash fertilizer. This has traditionally been a high-quality company benefiting from a unique collection of resource assets. We invested in this company as we believed that earnings were due to turn after four years of weak road salt demand driven by mild Northeast winters and production problems at its potash mines. During 2013 the potash industry was rocked by the potential collapse of a European cartel, which led to falling potash prices. Facing significant uncertainty for the future of the potash market, we sold the stock during the period.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Aeropostale Inc

    Aeropostale (ARO) is a retailer focused on the teenage demographic. The company suffered declining earnings in 2012 as struggling competitors cut prices and customer preference moved away from Aeropostale’s traditional strength in core basics towards higher fashion content. We believed that the Aeropostale’s brand was still relevant and that the company would benefit as improving inventory positions at competitors eased price competition and as the addition of a new head of design improved the company’s fashion offerings. This did not materialize, however, and the company continued to struggle. We exited the position at a loss to invest in other companies with greater growth potential.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Polaris Industries Inc

    Polaris Industries, Inc. (PII) is a leading manufacturer of recreational vehicles such as ATVs, snowmobiles, and motorcycles. We invested in this company several years ago during a cyclical disruption to their business. We were attracted to their opportunity to gain share with several new manufacturing initiatives as well as new growth markets. The company has executed almost flawlessly and the stock has been a strong contributor to the portfolio.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Ubiquiti Networks Inc

    Ubiquiti Networks, Inc. (UBNT) designs and manufactures wireless broadband infrastructure equipment and other communications products. Ubiquiti Networks, Inc. suffered declining earnings in late 2012 as its rate of growth created operational challenges that resulted in a short-term disruption to sales, which we believed was fixable. With better controls in place in 2013, revenue and earnings growth resumed and the stock price more than doubled from our original purchase price. We continue to like their opportunity to grow market share in a very large and growing market.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Broadridge Financial Solutions

    Broadridge Financial Solutions, Inc. (BR) is a leading provider of investor communication and securities processing services. The stock price had been fairly stagnant for a number of years due to temporary softness in its core market and ongoing investments in future growth initiatives that lowered current profitability. In 2013 these headwinds waned, leading to renewed earnings growth, multiple expansion, and strong stock performance.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Dresser-Rand Group Inc

    Dresser-Rand Group, Inc. (DRC) also declined slightly during the period, causing a drag on overall performance. Dresser–Rand reported weak third quarter results due to the more volatile “new unit” segment and negative free cash flow due to higher working capital investments. We continue to like the investment given the consistent performance from its aftermarket segment and believe that the company has opportunities driven by new products and continued oil service investment.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Noodles & Co

    Noodles & Co. (NDLS) also detracted from Fund performance during the period. Noodles & Co. continues to execute on its growth plan but same-store sales growth came in slightly below expectations due to lower traffic and the impact of the Colorado floods. Noodles & Co. currently has 370 restaurants and we believe that the company has an opportunity to dramatically increase the store base at good unit economics.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Polypore International Inc

    Polypore International, Inc. (PPO) was the Fund’s largest detractor during the period. The company reported a weak third quarter with revenues and EPS missing consensus estimates. Additionally, the company announced that it was in the process of renegotiating contracts with its largest customers and that the outcome of these negotiations was difficult to predict. We continue to own the stock because we believe that Polypore has proprietary technology that allows it to manufacture the highest quality battery separators at the lowest cost. As electric and hybrid vehicles continue to increase their penetration of the auto market, we believe that Polypore should be poised to grow at high incremental margins and at high returns on invested capital.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Affiliated Managers Group Inc

    Affiliated Managers Group, Inc. (AMG) is an asset management company that invests in boutique asset management firms. The stock generated substantial returns during the period due to a favorable market environment, strong performance by many of its affiliated managers, and healthy inflows into the managers’ investment products. Inflows over the trailing 12-month period ending September 30, 2013 exceeded $40B and assets under management reached $508B. Like LKQ, we reduced the Fund’s position in Affiliated Managers Group as it approached our price target and as its market capitalization grew to exceed our $10 billion threshold used to determine when to exit positions.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on Trimble Navigation Ltd

    Trimble Navigation, Ltd. (TRMB) was also a top contributor during the period. Trimble Navigation’s GPS solutions continued to gain traction in the marketplace, which drove strong fundamental performance. Trimble Navigation’s products enable customers to increase overall productivity and reduce costs, which we believe creates strong demand for their products. Based on the low market penetration across myriad industries and geographies, we continue to view the company as very well positioned.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • Meridian Funds Comments on LKQ Corp

    LKQ Corp. (LKQ) was the Fund’s top contributor in the six-month period ending December 31, 2013. The company is a leading distributor of alternative collision repair parts in a market estimated to be $59 billion. During the period, LKQ reported strong second quarter earnings growth and announced the acquisition of Keystone Automotive Operations, which benefited performance. While we continue to believe that LKQ has further growth potential in a large fragmented market, we trimmed the stock meaningfully in the period as it approached our price target.


    From Meridian Funds's semi-annual report ended December 31, 2013.

      


  • 5-year lows: Universal American Corp, Campus Crest Communities Inc, American Residential Properties Inc, and Jive Software Inc.

    According to GuruFocus list of 5-year lows, these Guru stocks have reached their 5-year lows: Universal American Corp, Campus Crest Communities Inc, American Residential Properties Inc, and Jive Software Inc.


    Universal American Corp (UAM) Reached the 5-year Low of $6.92

      


  • Doctor Pepper Snapple Goes Ex-Dividend Tomorrow

    Doctor Pepper Snapple Group Inc. (DPS) is a mature business, and a remarkably shareholder friendly one at that. The dividend yield is currently a hefty 3.41%, and the company has bought back 6% of its shares through the past three years. An investor can sensibly look for income and capital appreciation with long-term horizons. The stock goes ex-dividend in the near future, on Sept. 12, and scrutiny is appropriate.

    There are considerations. The Coca-Cola Company (KO), an outsized peer, has been underperforming, though it maintains one of the highest industry multiples. Its results may not bode well for DPS. It also is not clear how much of an effect Soda Stream International (SODA), which offers homemade carbonated beverages, might have on the future revenues soft drink companies.  


  • Meridian Funds Comments on Haemonetics

    Haemonetics (HAE) is the market leader in blood management products for collection centers and hospitals. The company's equipment and related consumables allow collection centers to separate blood into the components of plasma, red cells and white cells. Hospital-based products include blood diagnostics, devices to salvage patient blood during surgery and software to manage blood supply. Earnings temporarily declined due to two product quality issues that management of Haemonetics has stated have been remedied. In our opinion, earnings growth may be expected to accelerate in the next few years as Haemonetics rolls out its automated whole blood collection solution to collection centers. Relative to the existing manual process, the company's automated solution speeds up the collection process and reduces discard rates. Cost and efficiency gains become more important to collection centers as hospitals better manage their blood supply. We believe the company is a compelling value at 12x our $3.50 estimate of earnings power.

    From Meridian Funds' June 30, 2013 commentary.  


  • Meridian Funds Comments on Perrigo

    Perrigo (PRGO) is a global manufacturer of over-the-counter (OTC) store brand and generic prescription pharmaceuticals, infant formulas, nutritional products and active pharma ingredients. The company is the dominant player in the OTC drug market with the largest distribution network and broadest range of product offerings. The OTC store brands have increased their market share by about 1-2% annually at the expense of national name product given their superior value proposition to both the consumer and retailers. Perrigo has numerous growth drivers over the next few years including the continued penetration of OTC store brands and introduction of new product categories. The stock sells at a reasonable valuation, in our opinion, given the company's strong management team, financial returns and long-term growth prospects.

    From Meridian Funds's commentary for the quarter ended June 30, 2013.  


  • Meridian Funds Comments on Leggett & Platt

    Leggett & Platt (LEG) is a leading manufacturer of engineered products and components. As the pioneer of steel coil springs found in mattresses and furniture, the company continues to supply a variety of components to bedding and furniture manufacturers. Additionally, Leggett & Platt's broader product line includes retail store fixtures, office furniture components, automotive seating components and industrial steel wire and tubing. Customers choose Leggett & Platt as a supplier because the company's manufacturing scale and processes result in lower costs than customers can produce themselves. We believe earnings should grow based on the contribution of new products, cost reduction efforts and the improving housing market. Moreover, future dividend growth appears likely based on a 42-year record of dividend increases. We believe Leggett & Platt is an attractive investment based on its 3.8% dividend yield and positive growth outlook.

    From Meridian Funds's second quarter 2013 commentary.  


  • Meridian Funds' Commentary for Quarter Ended June 30, 2013

    To Our Shareholders:

    Stocks continued their positive performance during the quarter ended June 30, 2013. For the quarter, the S&P 500 gained 2.9%, the NASDAQ gained 4.2% and the Russell 2000, which includes smaller companies, gained 3.1%. Combined with the strong performance in the quarter ended March 31st 2013, stocks enjoyed a robust first half of 2013. Economic factors were mixed but relatively benign; optimism over the housing market continued to buoy the U.S., and economic declines in Europe appeared to be slowing if not stabilizing. Emerging markets fared poorly due to worries of slowing growth, particularly in China and Brazil, but did not appear to dampen the performance of U.S. domestic stocks. The yield on the ten-year U.S. Treasury bond jumped from 1.87% to 2.52% during the quarter as the economic outlook continued its gradual improvement and the market acknowledged potential endings for the Federal Reserve's quantitative easing programs. The best performing sectors during the quarter were financials, consumer discretionary and healthcare. The worst performing sectors were utilities, basic materials and energy. Financials performed well as rising rates and a steepening yield should improve the profitability of lending products. However, these same circumstances pressured the value of utility shares as higher rates are likely to simultaneously increase the competition for yield and reduce the value of dividends paid by these low growth companies.  


  • Eight Gurus Hold, Three Reduce AMG – A Collective of Investment Talent

    Affiliated Managers Group Inc. (AMG) may become the ultimate guru, the guru that contains many other wise gurus within itself.

    Affiliated Managers Group Inc. is a global asset management company that operates through a collective of diverse boutique investment firms and open-architecture funds. Utilizing a cooperative-like approach, AMG has equity investments in a group of select investment management firms. The asset management company offers clients the collective strength based on the expertise, talents and track records of renowned investors like Donald Yacktman and others. AMG’s website currently lists 25 affiliates, including recognized gurus Third Avenue Management LLC, Tweedy, Browne Company LLC, and most recently acquired, Yacktman Asset Management. AMG ensures that affiliates maintain operational autonomy in managing their business.  


  • Discount Store Stocks Reflect Smart Shoppers

    What is the relationship between Wal-Mart and Dollar Tree? The second quarter 2013 financials from the discount giants seem to reflect the increasing trend of smart shoppers who desert Wal-Mart on items that cost less at Dollar Tree. Wal-Mart Stores Inc. (WMT) shows a 1% increase in net sales for the quarter, whereas Dollar Tree Stores Inc. (DLTR) is up 8.3% for the same.

    The GuruFocus Buffett-Munger Screener currently highlights these two discount stores for high predictability and EBIDTA growth. The consumer defensive sector they belong to describes not only companies that make food, beverages and tobacco, but also manufacturers of household and personal products as well as packaging.  


  • Meridian Funds' Top Five Second Quarter Increases

    During the second quarter the Meridian Funds added 15 stocks, bringing their total to 149 stocks valued at approximately $2.7 billion. According to Meridian’s website, the fund invests primarily in equities which they believe to be undervalued in relation to the company’s long-term earning power or asset valued. This could also include companies that have suffered earnings declines but which the fund’s portfolio managers believe are positioned to resume long-term growth. Jamie England and Jim O’Connor serve as co-portfolio managers of the Meridian Funds.

      


  • Meridian Funds Comments on Huron Consulting

    Huron Consulting (HURN), one of our larger holdings, is a leading provider of consulting services to the healthcare, higher education and legal markets. The company advises hospitals and universities on ways to cut costs, gain efficiencies and improve outcomes. Legal consulting helps companies reduce their outside legal costs. New management led Huron back from a sizable earnings restatement in 2009 with limited consultant turnover and its reputation intact. The company's healthcare practice benefits from the need for hospitals to become more efficient due to lower reimbursement rates, sluggish patient volumes and less high margin elective procedures. Hospitals will also need external advice in adapting to the changes enacted under the Affordable Care Act, including the shift from a fee-for-services payment model to pay-for-performance. We believe the company is a compelling value at 11x our $3.70 estimate of earnings power.

    From Meridian Fundscommentary on the quarter ended March 31, 2013.  


  • Meridian Funds Comments on Affiliated Managers Group

    Affiliated Managers Group (AMG), one of our largest holdings, is an asset management company that typically acquires a significant ownership in growing boutique investment firms while retaining key investment principals to continue managing the investment portfolios. Among many asset managers, the company is viewed as a preferred acquisition partner given its long term track record in growing acquired firms and providing an attractive incentive structure. Affiliated Managers has numerous growth drivers that, we believe, should enable it to grow faster than the industry including continued acquisition of new firms, further penetration into international markets, and expansion into new services such as wealth management. In our opinion the stock sells at a reasonable valuation given the company's strong management team, financial returns and long-term growth prospects.

    From Meridian Fundscommentary on the quarter ended March 31, 2013.  


  • Meridian Funds Comments on Flowers Foods

    Flowers Foods (FLO), one of our larger holdings, makes fresh bread, snack cakes and pastries under the Nature's Own, TastyKakes and Mrs. Freshley's brands, among others. It is the second largest fresh bread company in the US and the largest in the Southeast. Competitive advantages include a low-cost manufacturing footprint of modernized bakeries and the industry's most efficient delivery network. We believe that above industry average growth should continue as Flower expands its delivery network in the West, Northeast and Midwest. Growth, in our opinion, should be augmented by the recent purchase of several bakeries and brands at attractive prices from bankrupt rival Hostess Brands. The current dividend yield is 2.1% and we believe future dividend increases appear likely based on attractive earnings growth prospects, a payout of less than half of forward earnings and historical dividend per share growth at a 15% five year compound annual growth rate.

    From Meridian Fundscommentary on the quarter ended March 31, 2013.  


  • Meridian Funds Third Quarter 2013 Report

    To Our Shareholders:

    Stocks were strong during the quarter ended March 31, 2013, with most indexes reaching or approaching multi-year highs. For the quarter the S&P 500 gained 10.0%, the NASDAQ gained 8.2% and the Russell 2000, which includes smaller companies, gained 12.0%. This rally overcame mixed economic indicators and negative macro factors in the headlines, such as renewed European financial problems coming out of Cyprus and domestic issues such as sequestration. Support for equities came from the ongoing commitment to low interest rates and liquidity by the Federal Reserve, strength in home prices, resilient consumer spending and renewed interest in the equity markets from retail investors. Reflecting these mixed signals, the best performing sectors during the quarter were defensive in nature led by health care, consumer staples and utilities. Technology and basic materials were the worst performers. The yield on the ten-year Treasury bond ticked up modestly from 1.78% to 1.87% during the quarter as the economic outlook was essentially unchanged.  


  • Significant Insider Clusters Reported in the Technology, Consumer Cyclical and Financial Industries

    In the past week, we have seen an increase in clustered insider transactions. An insider cluster occurs when two or more corporate executives or directors make transactions into their own companies.

    It is interesting and important to look at insider activities because insiders tend to be contrarian investors, meaning they tend to sell more when the market is high and buy more with the market is low. Also, insiders have shown to be keen investors in their company by making notable transactions over six months before a swing in the market.  


  • Meridian Funds Inc. Semi-Annual Review

    To Our Shareholders:

    Stocks were mixed in the quarter ended December 31, 2012 as declines during the fall were largely erased by a year-end rally that preserved strong gains for the markets in 2012. Ongoing US fiscal issues, highlighted by the presidential elections, weighed on the market early in the quarter. Despite little or no resolution to these structural issues, the markets staged an impressive post-election comeback helped by continued gradual improvement in economic indicators at home, ongoing commitment to low interest rates and liquidity by the Federal Reserve, signs of economic improvement in China and a lack of bad news coming out of Europe. For the quarter, the S&P 500 declined 1.0%, the NASDAQ lost 3.1% and the Russell 2000, which includes smaller companies, gained 1.4%. The quarter's best performing sectors included financials, industrials and consumer cyclicals. Technology, energy and utilities were among the worst performing groups. The yield on the ten-year Treasury bond ticked up from 1.66% to 1.78% during the quarter, reflecting modestly improving economic indicators.  


  • Weekly Guru Bargains Highlights: HAE, DLTR, QCOR, MTX, AMD

    According to GuruFocus updates, these stocks have declined the most since Gurus have bought.

    Haemonetics Corp. (HAE): Down 42% Since Meridian Funds Bought in the Quarter Ended on 2012-09-30  


  • Weekly Guru Bargains Highlights: FTNT, VVUS, HAE, PC, TIBX

    According to GuruFocus updates, these stocks have declined the most since Gurus have bought. Fortinet, Inc. (FTNT): Down 22% Since Paul Tudor Jones Bought in the Quarter Ended on 9-30-2012

    Paul Tudor Jones added to his holdings in Electronic Equipment company Fortinet Inc. by 136% during the quarter ended 9/30/2012. His purchase prices were between $20.93 and $27.68, with an estimated average price of $24.64. Since then the prices of Fortinet Inc. shares have declined by -22% from the estimated average. Paul Tudor Jones owned 53,100 shares of as of 9/30/2012.  


  • Weekly Guru Bargains Highlights: SAVE, HNT, MRVL, PAY, HK

    According to GuruFocus updates, these stocks have declined the most since Gurus have bought.

    Spirit Airlines Incorporated (SAVE): Down 21% Since Manning & Napier Advisors, Inc Bought In the Quarter Ended on 2012-06-30  


  • CEO, President of Kimco Realty Corp David Henry Sold 70,000 Shares

    Kimco Realty Corp. together with its subsidiaries, is a self-administered real estate investment trust and is one of the nation's largest owners and operators of neighborhood and community shopping centers. Kimco Realty Corp. has a market cap of $8.27 billion; its shares were traded at around $20.22 with a P/E ratio of 16.7 and P/S ratio of 9.5. The dividend yield of Kimco Realty Corp. stocks is 3.7%.

    CEO, President of Kimco Realty Corp. (KIM) David Henry sold 70,000 shares on Aug. 21, 2012 at an average price of $20.4. The total transaction amount was $1,428,000.  


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