A case in point is portfolio holding Donaldson & Co., Inc. (DCI), one of the leading international manufacturers of high-tech filtration solutions for engines. For the past century, despite interest- rate shocks, stock market corrections and world wars, Donaldson has prospered and grown. Faced with a global slowdown in construction projects, Donaldson’s sales growth slowed and its stock price declined – while earnings held their ground and even increased slightly. To Mairs & Power, nothing fundamental changed for Donaldson. Our assessment of the firm’s long-term growth prospects is still supported by the quantitative data and our qualitative findings that matter most in our selection process. Rather, the impact of short-term, negative market perceptions on consistently growing companies like Donaldson offers us an incentive to add to a position we already like at an attractive price.
From Bill Frels (Trades, Portfolio)' Mairs & Power Balanced Fund Q3 2014 Commentary.
