The top contributing stock for a second quarter in a row was Konecranes (OHEL:KCR, Financial), the Finnish company that specializes in the manufacture and service of overhead cranes and lifting equipment. During the quarter, the company announced second-quarter earnings that were above expectations. Even though Covid-19 dampened the demand for Konecranes' products and services, which resulted in a 14.2% drop in revenue, all three of the company's divisions reported improved margins over the previous quarter, largely due to management's significant cost reduction efforts. During the quarter, the company announced additional cost reductions and restructuring activities, which should further improve profitability. During the second quarter, Konecranes also enjoyed solid free cash flow generation, driven by resilient margins and significant working capital release. We believe the company remains an attractive investment and is well positioned for long-term growth and profitability. After the close of the quarter, Konecranes and Cargotec, a Finnish cargo handling machinery maker, announced plans to merge. The two companies expect that the merger will increase scale and generate at least EUR100 million of synergies. News of the merger sent the share price of Konecranes up sharply.
From David Herro (Trades, Portfolio)'s Oakmark Intl Small Cap (Trades, Portfolio) Fund third-quarter 2020 commentary.
