We initiated a position in the world's leading provider of thermal cameras, FLIR Systems, Inc. (FLIR, Financial) in the quarter. FLIR's competitive advantages in industrial and defense thermal imaging technology provide an attractive long-term financial profile. The company's scale, combined with a vertically integrated cost structure, with a research and development focus, allows it to price products competitively, earn operating margins above peers and consistently reinvest in innovation. Investor concerns around an industrial recession and defense budget cut fears driven by the pandemic provided us with an entry point to own this niche industry leader, with attractive long-term growth and margin prospects.
From John Rogers (Trades, Portfolio)' Ariel Focus Fund third-quarter 2020 commentary.
