Missouri native David Rolfe (Trades, Portfolio) became passionately interested with investing in 1984 after he signed up for an investments class at the University of Missouri, St Louis. Rolfe entered the class called Investments 334 and began to fall in love with the thought of investing in the stock market. He became so interested that he and another student alongside his professor Dr. Ken Lock founded “The Student Investment Club.” The club started out as a paper portfolio and it still continues to run today, competing against schools across the U.S.
Rolfe's professor advised him to read classic books on investing, while introducing him to the philosophies and mental models of legendary investors such as Benjamin Graham, Warren Buffett (Trades, Portfolio), and John Marks Templeton.
After he finished school in late 1985, Rolfe became a stockbroker enamored of focused investing, with the goal of one day becoming the head of an investment firm. After four years as a stockbroker, Rolfe received an offer to manage Wedgewood Partners Inc. when the CEO retired.Ă‚ Rolfe has been the CEO of Wedgewood Partners ever since he was originally hired in the spring of 1992.
In the fourth quarter of 2015, Rolfe nearly doubled his holding in Perrigo Co. PLC, adding 1,297,542 shares to Wedgewood Partners' portfolio.
Perrigo Co. PLC is also traded in Germany and Israel.
Perrigo Co. PLC's history dates back to 1887 when Luther Perrigo, the proprietor of a general store had the idea to package and distributed patented medicines and household items for country stores. Since then the company has significantly grown and expanded. Perrigo Co. operates multiple businesses within the Perrigo brand, which includes: health care, nutritionals, Rx pharmaceuticals, active pharmaceutical ingredients, specialty sciences and other businesses. As of Dec. 31, 2015, Perrigo employs approximately 13,300 full time and temporary employees worldwide.
In the fourth quarter of 2015, Wedgewood Partners commented on Perrigo:
Perrigo (NYSE:PRGO) is another position that we added to during the quarter. We had previously pared positions at materially higher levels after Mylan’s hostile bid for Perrigo became public information. Upon the recent expiration of the hostile offer, shares traded down to valuation levels not seen since 2008-2009, at which time we added back to our position. Management has guided to solid future growth, driven by the Company’s leading position in manufacturing and distributing private label over-the-counter (OTC) drugs to U.S. retailers, as well as its relatively new and rapidly expanding European OTC platform.
Perrigo Co. PLC has a market cap of $18.08 billion, a P/E ratio of 125.36, an enterprise value of $23.39 billion, a P/B ratio of 1.68 and a dividend yield of 0.41.
Rolfe (Trades, Portfolio) made a great investment decision to increase his holdings in Perrigo Co. for the following reasons:
- The company closed on the Omega acquisition for €3.6 billion on March 30, 2015, which made them a top-five global OTC company.
- It has proved to be an efficient company and has 129 years of experience within its industry.
- Perrigo Co. is trading below its intrinsic value.
- The company’s dividend yield is close to a five-year high.
- The company's book value has grown at an average rate of 27% over the previous 10 years.
