The second new U.S. equity purchase was General Dynamics (GD, Financial), a leading U.S. defense contractor and owner of the world's premier business jet franchise (Gulfstream). We were able to purchase this high-quality and durable business at a meaningful discount to our estimate of its intrinsic value after a series of near-term concerns hurt its share price. Taking a longer term view, the company's business jet franchise should benefit from a multi-year investment program in new, differentiated product. Also, its free cash flow conversion is set to improve materially and the company is poised to benefit from a highly visible ramp up in revenue related to next generation nuclear-powered submarines. As these positives come into clearer view, we expect sentiment to improve, along with the company's share price.
From David Herro (Trades, Portfolio)'s Oakmark Global Fund first-quarter 2021 shareholder commentary.
