The largest detractor among the Fund’s holdings was MasterCard, Inc., Class A shares (MA), at minus 45 basis points from a 12% decline in its share price. After an excellent performance in 2013 where earnings growth outpaced expectations and the stock price responded accordingly, 2014 has seen continued earnings growth but a reduction in the price/earnings multiple iii attached to those earnings. The imposition of financial sanctions against Russia for its annexation of Crimea raised questions about MasterCard Inc.’s long term presence in Russia and its earnings growth. However, the outlook is positive as transactions in many countries will continue to move from paper based systems for commerce to electronic transactions.
From Westport Asset Management (Trades, Portfolio)’s Westport Fund Second Quarter 2014 Commentary.
