The top performing stock in the Fund this past quarter was gategroup (XSWX:GATE) (“Gate”), a Swiss company that provides services to the travel industry, including flight catering, airport services and lounge operation. During the quarter Gate reported its third quarter results, which showed that its multiyear restructuring program was beginning to have a positive impact on group margins. Furthermore, 2014 proved to be one of the better operating environments for the airline industry (Gate’s key customers) since the financial crisis due to robust passenger growth and recent declines in oil prices, which have helped airline profitability. The more favorable macro backdrop should benefit Gate into 2015, but the key driver to value creation will be the continued execution of its cost-reduction plans. In November, Gate’s board appointed Christoph Schmitz as its new Chief Financial Officer, which we hope leads to better execution of the cost-reduction plan and increased focus on improving the cash conversion of the business.
From David Herro (Trades, Portfolio)'s Oakmark Intl Small Cap (Trades, Portfolio) Fund 4Q 2014 Letter.
