Ultimately, we pay more attention to the underlying financial performance of the companies in our investment portfolio than we do their stock charts and in one instance, Omnicare (OCR
), the largest supplier of pharmaceuticals to patients in nursing homes, delivered in spades. New management came in several years ago and began executing on a business plan that revolved around basic blocking and tackling to improve performance. While the engineer of the turnaround, John Figueroa, has handed off the plan to his successor, the momentum remained intact under the present CEO, John Workman. The company has lowered costs, reduced customer churn, won new accounts and essentially built the best mousetrap in the institutional pharmacy space. The net result is that all of the aforementioned improvements in aggregate have manifested themselves in the form of higher and more consistent earnings. Those achievements and the belief that the company's future continues to look bright are reflected in a stock price that has more than doubled from our original cost.
From Steven Romick
's FPA Crescent Fund second quarter commentary