Westport Asset Management

Westport Asset Management

Last Update: 2014-11-13

Number of Stocks: 56
Number of New Stocks: 2

Total Value: $1,007 Mil
Q/Q Turnover: 1%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Westport Asset Management' s Profile & Performance

Profile

The firm's investment philosophy is a modified form of bottom-up value investing that combines classic value investment with forward-looking business analysis. This approach combines low valuation, a value attribute, with improving earnings and cash flow, a growth attribute. This variation of value investing may reduce downside risk while offering the potential for capital appreciation as a stock gains favor among other investors as its price increases.

The firm's investment focus is on companies selling at a substantial discount to their intrinsic value. These companies are often out of favor with Wall Street due to transitory problems.

Principles of the firm include founder Andrew J. Knuth and Managing Director Edmund H. Nicklin, Jr.

Web Page:http://www.westportfunds.com

Investing Philosophy

Normally, the Westport Fund invests primarily in undervalued common stocks of mid capitalization companies. A mid capitalization company is defined as having a market value between $2 and $10 billion. The Westport Fund will opportunistically invest in securities of companies with both larger and smaller market capitalizations, but expects the median market capitalization of the Fund to be in the mid capitalization range. The Westport Fund considers several factors as part of its analysis for determining value, primarily the potential for capital appreciation and secondarily the potential for current income.

Total Holding History

Performance of Westport Fund

YearReturn (%)S&P500 (%)Excess Gain (%)
201328.5431.55-3.0
201212.2615.4-3.1
20113.242.081.2
3-Year Cumulative49 (14.2%/year)55 (15.7%/year)-6 (-1.5%/year)
201020.0615.065.0
200932.1726.465.7
5-Year Cumulative136.4 (18.8%/year)125.5 (17.7%/year)10.9 (1.1%/year)
2008-30.28-376.7
200713.715.618.1
200613.2715.79-2.5
200511.614.916.7
200416.86124.9
10-Year Cumulative176.9 (10.7%/year)104.1 (7.4%/year)72.8 (3.3%/year)
200329.3628.70.7
2002-16.91-22.15.2
20013.99-11.915.9
20008.68-9.117.8
199946.132125.1
15-Year Cumulative391.5 (11.2%/year)98.3 (4.7%/year)293.2 (6.5%/year)
199812.228.6-16.4

Top Ranked Articles

Westport Asset Management Buys MSM, ROST, MA, CHKP, LH, WSH, FST, Sells DV
Westport Fund has outperformed the market in eleven out of the last twelve years. Their 10 year cumulative return is 108%, while the market gained just 16.4%. This is the portfolio update for the first quarter of Westport. Read more...
Westport Asset Management Makes Two Sells in Q3 Portfolio Update
Milwaukee-based Westport Asset Management reported its portfolio updates for the third quarter that ended Sept. 30, a short list containing only one reduction and one complete sell of all its shares of one company, in addition to three increases in current shareholdings and one new holding – six transactions in total. Read more...
Westport Asset Management Comments on Precision Castparts
Making the third largest contribution for the half was Precision Castparts Corp. (PCP), the components supplier to the aerospace industry. After being essentially flat in the first quarter, the stock rose over 19% in the second quarter, adding 177 basis points to performance. As we had anticipated, the shares rose as problems with Boeing's 787 were resolved. Read more...
Westport Asset Management RSG, SGY, LPS, CHKP, Sells KBR, AIR, ELMG, DBD
Westport Asset Management just reported their fourth quarter portfolio. The firm likes to invest in undervalued companies with market cap between $2 and $10 billion. The firm’s flagship fund Westport Fund has achieved impressive performance since 1999. The fund outperformed the market every year except for 2006, when the fund underperformed by 2.5%. Read more...
Westport Funds Selects 1 Stock in Q2
Westport Funds, a firm led by Andrew Knuth and Edmund Nicklin that has beat its index since inception, is having a strong year as well. The Westport Select Cap Fund has returned 22.06% from the start of the year through July 31, even through higher volatility in May and June. “A focus on the long-term and avoidance of short-term fads, even those that seem compelling, is a key factor in these long-term results,” the fund’s manager wrote in their second quarter shareholder letter. Read more...
» More Westport Asset Management Articles

Commentaries and Stories

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Westport Asset Management’s Westport Select Cap Fund Third Quarter 2014 Commentary
Portfolio Review More...

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Westport Fund Comments on American Eagle Outfitters & McCormick & Company
Two portfolio holdings were eliminated in the third quarter of 2014 – American Eagle Outfitters, Inc. (AEO) and McCormick & Company, Inc. (MKC) as future returns were viewed as unlikely to reach the levels needed for retention in the portfolio. More...

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Westport Fund Comments on PetSmart Inc
PetSmart, Inc. (PETM) (retailer of pet products and services) appreciated 17% in the quarter due to acceptable earnings and a board decision to evaluate “strategic alternatives,” including a sale of the company. This course of action was aggressively advanced by an activist investor. More...

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Westport Fund Comments on EOG Resources Inc
Slowing growth in China, little growth in Europe and continued increases in U.S. oil production raise questions about the oil price needed to balance supply and demand. Not surprisingly, energy was the other major disappointing industry segment in the quarter, subtracting 98 basis points on a relative basis from Fund results versus its benchmark Index. While the share prices of all three energy portfolio holdings were down, EOG Resources, Inc. (EOG), after an excellent first half, decreased the Fund’s return by 107 basis points. In the first nine months of 2014 energy was the best performing industry segment and EOG Resources, Inc. contributed 57 basis points to the Fund’s return. More...

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Westport Fund Comments on FMC Corp
Of the industry segments, Materials and Processing saw the poorest relative return versus the Index at a negative 109 basis points with the largest detractor, FMC Corp. (FMC) (agricultural and food products), at a negative 92 basis points. Drought in South America, compressed North American planting schedules and bumper crops of corn and soybeans have led to reduced applications and sales of agricultural chemicals. More...

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Westport Asset Management’s Westport Fund Third Quarter 2014 Commentary
Portfolio Review More...

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Westport Select Cap Fund Comments on Zebra Technologies Corp
The Fund made one new purchase during the quarter, Zebra Technologies Corp (ZBRA), Class A shares (“Zebra”). This company has established a leading position in data collection and product identification and announced the acquisition of a unit of Motorola Solutions, Inc. This deal will expand Zebra’s market position into mobile and network solutions while doubling the company’s size and adding significantly to its earnings per share. More...

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Westport Select Cap Fund Comments on Precision Castparts Corp
Precision Castparts Corp. (PCP), the Fund’s second largest position, was off 6%, costing 61 basis points. There are questions regarding the future organic growth rate of the commercial aircraft industry and the company. This comes despite the company’s continuing profit improvement as it integrates recent acquisitions. More...

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Westport Select Cap Fund Comments on IPG Photonics Corp
IPG Photonics Corp. (IPGP) fell 11.4 %, costing 81 basis points as investors continue to be concerned about second half demand from China for the company's precision laser products. More...

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Westport Select Cap Fund Comments on DeVry Education Group Inc
DeVry Education Group, Inc. (DV), our for-profit education stock, rose over 19%, adding 117 basis points. The company’s diversification efforts have cushioned the negative impact of continued declines in student enrollments at the main operating unit, DeVry University. More...

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Westport Select Cap Fund Comments on Big Lots Inc
The off-price retailer, Big Lots, Inc. (BIG), added 154 basis points. The company’s shares gained over 41% as new management’s merchandising changes showed early signs of success. More...

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Westport Select Cap Fund Comments on Universal Health Services Inc
The second largest contributor to first half performance was Universal Health Services, Inc. (UHS), Class B shares, the fund’s largest position. The operator of acute care and mental health hospitals gained nearly 18% and contributed 182 basis points. First quarter earnings exceeded estimates, reflecting the early positive impact of the Affordable Care Act (also known as “Obamacare.”) More...

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Westport Select Cap Fund Comments on United Rentals Inc
During the first half of 2014, four stocks contributed 1% or more to performance. The leader was United Rentals, Inc. (URI), which rose 34% and added 201 basis points iii. Already the largest factor in the rental of equipment used in non-residential construction, the company announced the acquisition of National Pump Company. This purchase will expand the company’s position in the fast growing energy sector, and is projected to be highly accretive to earnings. More...

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Westport Asset Management’s Westport Select Cap Fund Second Quarter 2014 Commentary
During the second quarter, the Westport Select Cap Fund’s Class R shares rose 2.76%, ahead of the Russell 2000® Index’s gain of 2.05%. For the first six months of 2014, the Westport Select Cap Fund’s Class R shares outperformed the Russell 2000® Index with a return of 4.94%, compared to a return of 3.19% for the Index. More...

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Westport Fund Comments on Zebra Technologies Corp
A new position was also established in Zebra Technologies Corp., Class A shares (“Zebra”) (ZBRA), a provider of industrial products used for data collection and automatic identification systems. When Zebra announced in mid-April that it would purchase the mobile-computing services unit of Motorola Solutions, Inc., its share price declined. Investors were concerned with the historical performance of this Motorola, Inc. unit, the fact that it was approximately the same size as Zebra and that the cash transaction would transform Zebra’s balance sheet from debt-free to heavily leveraged. Both companies offer bar code and radio frequency identification used to control inventories but service different end markets. The Motorola Solutions, Inc. unit will enhance mobile and network capabilities. More...

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Westport Fund Comments on Bed Bath & Beyond Inc
Bed Bath & Beyond, Inc. (BBBY) was added to the portfolio after it provided a disappointing outlook for the remainder of the fiscal 2014 year. The focus of investor concerns is on the company’s ability to improve multi-channel sales by expanding its internet marketing capabilities. The company is a retail leader in domestic merchandise and household furnishings. More...

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Westport Fund Comments on MasterCard Inc
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. More...

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Westport Fund Comments on Universal Health Services Inc
Health care holdings were the second largest industry sector contribution to the Fund’s performance at 128 basis points, similar to the 138 basis points contribution of the health care sector to the Russell Midcap® Index. The best performer among the portfolio holdings in health care was Universal Health Services, Inc., Class B shares (UHS) which contributed 64 basis points to performance with an 18% return in the first half. More...

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Westport Fund Comments on Stone Energy Corp
The best performing industry sector for the Westport Fund in this period was Oil & Gas Producers, which included three exploration and production companies. This sector provided 261 basis points to the portfolio return compared to the 105 basis points from the Energy holdings in the Russell Midcap® Index. … Stone Energy Corp. (SGY) provided a return of slightly more than 35% for the first half and added 27 basis points to the Fund’s performance. Continued growth in the world economy has been supporting oil prices and a very cold winter in the U.S. provided the impetus for higher natural gas prices. More...

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Westport Fund Comments on Anadarko Petroleum Corp
The best performing industry sector for the Westport Fund in this period was Oil & Gas Producers, which included three exploration and production companies. This sector provided 261 basis points to the portfolio return compared to the 105 basis points from the Energy holdings in the Russell Midcap® Index. … Anadarko Petroleum Corp. (APC) contributed 84 basis points to the Fund’s performance on a return of 38% after settling the Tronox litigation that arose from its purchase of Kerr McGee Corp. in 2006. More...

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