The stock that detracted the most from the Fund’s return in the quarter was Dana Holdings (NYSE:DAN). The company is generally lumped into the auto supplier industry group even though approximately 50% of their business is tied to commercial and off-highway vehicle markets. DAN has been weak over the past 1.5 years as investors continue to worry that the company’s commercial vehicle and off-highway markets won’t recover from their depressed levels, and that the strength of the light vehicle market will soon roll over. We purchased more shares of DAN in the quarter because we believe the stock was cheap when it was trading at less than 11.5x our downside case owner’s earnings.
From FPA Capital Fund (Trades, Portfolio)'s second quarter 2016 commentary.
