Motorola Solutions (NYSE:MSI), a provider of communications services and networks for public safety workers, sliced 46 basis points from the Fund’s return, as its stock fell 12.9% from $75.70 to $65.97. Just last quarter, Motorola was one of our biggest winners, as investors cheered the acquisition of Airwave, Great Britain’s public safety communications network. Those cheers, however, turned to boos when the British voted to leave the EU. Investor sentiment soured even further on the deal, as regulators initiated a review to ensure that it won’t suppress competition. Our positive opinion of Airwave hasn’t changed, as we believe it will be significantly accretive to earnings while strengthening Motorola’s international presence. The deal was cleared by regulators after the quarter ended, and we think Britain may actually need to increase its spending on public safety as it prepares to leave the European Union.
From Jerome Dodson (Trades, Portfolio)'s Parnassus Fund second quarter 2016 commentary.
