We initiated one new position in the quarter and eliminated one holding. Both issues are U.K.-domiciled entities. We sold our holding in Smiths Group (LSE:SMIN), a conglomerate active in seals (primarily for the oil and gas sector), healthcare, detection and connectors. Smiths’ new management team had a strong first year at the helm, highlighted by margin improvement at the detection division, the announced acquisition of Safran’s Morpho detection business and a significant de-risking of its U.K. pension plan. We view these developments favorably, as do other investors, and the share price has risen nearly 50% in local currency. However, this increased price more closely reflects our view of the business’ intrinsic value and thus we’ve found more attractive investment alternatives.
From David Herro (Trades, Portfolio)'s Oakmark Global Fund fourth quarter 2016 commentary.
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