Atea (OSL:ATEA), a Nordic IT infrastructure company, issued a profit warning in June, and this news, combined with a corruption investigation into its Denmark office, caused the stock price to suffer. As a result, Atea was the largest detractor from performance for the quarter. In regards to the investigation, Atea announced that it was determined to assist the police and that the case involved former employees who are now employed by another IT company. Neither Atea as a firm nor any one on Atea’s current management team has been charged with bribery. Management reported that it has known about this issue longer than it has been public, has investigated it internally and is confident that it did not take place in other geographies. This news has not affected any of the company’s business outside of Denmark, which has experienced a postponement of orders pending the outcome. Despite the corruption news, Atea holds leading market positions and competitive advantages as an IT infrastructure and system integration specialist, generates strong cash flow, produces high returns and is well-positioned to capture the long-term growth opportunities within the IT infrastructure market in the Nordic and Baltic regions.
From David Herro (Trades, Portfolio)'s Oakmark International Small Cap Fund Second Quarter 2015 Commentary.
