Bill Nygren's Oakmark Comments on Meitec
Another top contributor to performance was Meitec, returning 4% for the quarter. Meitec provides high-end outsourcing services to the research and development sector for various industries, including automobile, telecommunication, semiconductors, consumer electronics and industrial machinery. As the economic climate improves and hiring picks up, Meitec is poised to gain market share, especially since many other firms in this niche business went out of business during the global economic crisis. During the quarter, Meitec reported fiscal-year results -- the company’s revenue growth and operating profit slightly exceeded our estimates, despite utilization rates of only 93.6%, well below the historical average of 97%. The main factor leading to the decreased utilization was a price increase that prompted some customers to not renew their contracts. We believe this decreased utilization is short term and expect it to steadily return to historic levels. Meitec continues to build shareholder value and has consistently returned 100% of earnings to shareholders via buybacks and dividends. We continue to believe Meitec is a solid investment opportunity for our shareholders.