Bill Nygren's Oakmark Comments on Kuehne & Nagel
Kuehne & Nagel, one of the world’s leading freight forwarders, was also added to the approved list in mid-2008. Economic concerns in Europe are once again enabling us to purchase this attractive company for less than 50 cents on the dollar. We’re buying Kuehne & Nagel at only a slight premium to the new-idea buy price. The company’s freight volumes have grown over 6% per annum during a very tough economic environment, and its market share has moved from number four to number two globally, mostly via organic growth. Freight forwarding is a capital-light, cash-generative business that will benefit from the growth of global trade. We certainly understand that European economic growth has been and will continue to be weak. However, two characteristics make Kuehne attractive. First, a large portion of Kuehne’s European business comes from Germany. Second, Kuehne benefits from both European imports and exports, with the latter growing at a double-digit rate despite the problems in Europe.