Mettler-Toledo International Inc

We added to our position in Mettler-Toledo International Inc., a company we have owned in the Fund since inception. Mettler is a leading global provider of precision instruments and services. The company has a long track record of generating consistent earnings growth. Despite slightly below expectations for organic revenue growth and guidance, we believe the negative stock reaction was way overblown, leading to a valuation the stock had not seen in many years. We are confident that over the long-term Mettler can generate mid-teens or better annual earnings growth.

We have long admired Mettler’s business and purchased a small position during a brief period of price dislocation during the quarter. Mettler-Toledo is a global supplier of precision measurement instruments across laboratory, industrial and food retailing applications where accuracy, reliability and regulatory compliance are vital. Its highly specialized sales and service organization is a key competitive advantage, working collaboratively with customers to optimize their workflows and improve productivity, reinforcing long-term customer relationships.

We have long admired Mettler’s business and purchased a small position during a brief period of price dislocation during the quarter. Mettler-Toledo is a global supplier of precision measurement instruments across laboratory, industrial and food retailing applications where accuracy, reliability and regulatory compliance are vital. Its highly specialized sales and service organization is a key competitive advantage, working collaboratively with customers to optimize their workflows and improve productivity, reinforcing long-term customer relationships.

We believe Mettler-Toledo International Inc. has a strong competitive position and is well-positioned for future growth. The company has demonstrated solid performance, with a cumulative annualized return of 1,601.7% since we first purchased it in 2008, reflecting its durable competitive advantages and large addressable market. We expect Mettler-Toledo to continue benefiting from favorable market dynamics and its ability to generate attractive returns over time.

Mettler-Toledo International (MTD) has shown resilience despite facing challenges such as continued weakness in China and new healthcare regulations. The company is leveraging its pricing power and operating leverage to drive shareholder value growth. The manager believes that Mettler-Toledo is materially undervalued and is expected to return to durable double-digit annual intrinsic value growth, indicating a strong long-term investment potential.

Mettler-Toledo and Danaher sell essential equipment and consumables into the life sciences and pharma industries. All four companies are leaders in their respective markets and all benefit from solid growth tailwinds. Margins and returns are high, the businesses are not capital intensive, and revenue growth rates have generally ranged from mid- to high single digits. However, due to the COVID era, a large amount of demand was pulled forward for these businesses. Although it has taken longer than Andvari anticipated for growth to normalize for these businesses, when growth reverts to pre-COVID levels, we should see their share prices appreciate.