Leading contributors for the quarter represented a range of industries and included HeidelbergCement, Linear Technology, Microsoft Corporation, SMC Corporation and Teradata Corporation. HeidelbergCement (BOM:500292) released results in July that showed a sound cyclical improvement in its fundamental profitability. The company’s operations in North America, Scandinavia, the Netherlands and Germany continued to perform well, but there was softness in its Canadian oil sands business and in parts of Asia. Overall, though, the company displayed admirable cost discipline. HeidelbergCement is among the world’s largest holders of aggregates, but this component of its business, buried inside a cement company, has not been awarded the kind of higher valuation that the market confers on stand-alone aggregates companies. This now appears to be changing.
From First Eagle Global Value Fund third-quarter 2016 commentary. Continue Reading »