In the Oakmark International Small Cap Fund's 1st-Quarter Commentary 2024, Konecranes (HEL:KCR, Financial) was highlighted as a top contributor. The industrials company reported strong fourth-quarter results, with organic revenue growth surpassing expectations, primarily driven by its service and port solutions segments. The fund managers, including David Herro (Trades, Portfolio), noted the recurring nature and high quality of growth in Konecranes' service business as a key component of their investment thesis.
"In February, the industrials company reported a strong set of fourth-quarter results. Organic revenue growth came in above our expectations, mainly driven by the service and port solutions segments. Service sales increased by 11% in local currencies, driven by strength in both spare parts and field service. We like that Konecranes’ service business is delivering higher growth that is largely recurring in nature and of much higher quality than the growth in the equipment manufacturing divisions. This is a key component of our investment thesis. In addition, port solutions grew revenue by over 38% in local currencies in the fourth quarter as the business delivered on high order intake from prior periods while comparable EBITA margins increased. Also of note, port solutions entered 2024 with an order book higher than the previous year. Lastly, Konecranes reported 2024 guidance largely in line with our expectations. We continue to believe this investment offers an attractive upside." — David Herro (Trades, Portfolio), Oakmark International Small Cap Fund, Q1 2024 Fund Letter
Read full letter at gurufocus David Herro's Oakmark International Small Cap Fund 1st-Quarter Commentary 2024 Q1 page.
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