Alternatively, from an attribution perspective, there was not one particular sector that materially underperformed on a relative basis during the quarter. The weakest performer in the portfolio was specialty cutting tool insert maker Kennametal Inc. (KMT, Financial), which finished the quarter down -16.65%. We believe this price action runs counter to its strong business fundamentals. KMT is executing on a 3-year strategic plan that will improve economies of scale and generate margin improvement. Furthermore, despite near term adverse effects of tax reform on the company, stronger than anticipated end market demand for products resulted in management raising the adjusted EPS outlook for fiscal 2019.
From John Rogers (Trades, Portfolio)' first quarter 2018 Ariel Fund shareholder letter.
