Meridian Funds

Meridian Funds

Last Update: 2013-08-31

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

  • 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.  

  • 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.  

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