Babcock & Wilcox Enterprises (NYSE:BW) also performed well in the quarter. We discussed BW in our first quarter letter and pointed out that management made a poor strategic decision in its fast-growing renewables business, and that the stock was hit hard during that quarter for that mistake. Subsequent to publishing our first-quarter letter, BW hosted a quarterly earnings conference call and provided positive news on the company’s progress in fixing its problems. The near-term stock price performance now largely rests on the company’s ability to continue fixing the renewables problems and preventing further cost overruns in that division.
During the second quarter, we added three new stocks to the portfolio and eliminated three other companies. The three new stocks are in three different industries: one is an airline, another is a financial services company, and the other is a retailer. Two of the new stocks are what we refer to as ‘old friends’ because the Fund has invested in the companies before.
From FPA Capital's second quarter 2017 shareholder letter.
