The Fund's biggest detractor at the position level was agricultural equipment supplier, Lindsay Corporation (NYSE:LNN), the only one of the portfolio's 10 machinery holdings to finish the first half in the red. The company faced several challenges, including lower farming incomes that have crimped capital spending and led to ongoing weakness in its core market, excess rainfall and flooding in the Midwest, and tariff and trade war woes. In early July, however, Lindsay noted an uptick in domestic irrigation sales, while recent improvement in key crop prices such as corn have improved agricultural sentiment. In addition, the outlook for international irrigation demand remains favorable. We trimmed our stake slightly in the first half. We did the same with National Instruments, which supplies instrumentation hardware and software products for engineers and scientists. The company posted disappointing first-quarter sales, with broad weakness across much of its global business, including softening demand in Europe. The company is focusing its resources on higher-growth applications benefiting from key technology trends such as 5G and Advanced Driver Assist Systems, but it will take time for these initiatives to manifest in accelerated revenue growth and margin expansion--and we are prepared to be patient.
From the Royce Premier Fund second-quarter 2019 manager commentary.
This article first appeared on GuruFocus.
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