During the quarter we added Forest Laboratories (FRX)(FRX - $37) to the portfolio. Forest doesn't have the high yield or low P/E that has attracted investors to other pharmaceutical stocks, but it does have a collection of newly introduced drugs that we believe is worth significantly more than the stock price. A more complete explanation of our interest in Forest is available in the Oakmark Fund quarterly letter.
The purchase of Forest was largely funded by a continued reduction in our Discovery position. We couldn't be more pleased with Discovery’s growth in profitability, largely due to an increased number of viewers across its networks. We are also pleased with its use of cash to repurchase shares. But with the stock trading at $70, compared to less than $9 five years ago, it is hard to argue that investors are not giving them appropriate credit for that performance.