The Fund’s weakest performer was Perrigo (NYSE:PRGO), the leading producer of store-brand generic drugs, as its stock plummeted 42.5%, from $144.70 to $83.23, cutting 103 basis points from the Fund’s return. The shares sank in April after longtime CEO Joe Papa resigned to become the CEO of Valeant Pharmaceuticals. The stock continued to move lower throughout the year as the company cut its earnings guidance three times, from nearly $10 per share to just $7. The business underperformed due to declining prescription generic drug prices and soft growth from Omega, Perrigo’s European business. We sold our position during the year due to our concerns that the prescription generic pricing environment would get worse and that it would take longer than expected to fix Omega.
From the Parnassus Fund fourth quarter 2016 commentary.
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