05 Sep 2012 Meridian Value - Q2 2012 Commentary ( Portfolio )
Our investment strategy remains unchanged. We continue to seek out-of-favor companies typically having experienced an extended period of declining earnings. In recent years most earnings problems have been related to poor economic conditions. With some stability in the economy, albeit tenuous, we now see more companies that meet our strategy for company-specific reasons. These investments are the traditional strength and point of differentiation of the Meridian Value Fund. The Fund is invested in 52 positions, representing 34 industry groups along with Treasury Bills. We continue to invest in companies of all market capitalizations and our largest areas of concentration are technology, retail and transportation.

During the quarter we purchased shares of Brocade Communications, Haemonetics Corp, Lancaster Colony Corp. and Maidenform Brands.

Equifax, one of the Fund’s largest holdings, is a leading provider of information solutions that help financial institutions and other entities make decisions about extending credit. It holds the number one market share position in the majority of its geographic regions, generates strong margins and cash flow and maintains conservative financial leverage. The recession caused both borrowers and lenders to retrench, bringing down the earnings of Equifax as well. Consumer borrowing is improving in areas such as credit cards, auto loans and home mortgages. We believe that Equifax is particularly well positioned for this improvement beyond its core consumer credit database. It is up-selling exclusive data such as wealth and income data to help customers make more informed credit decisions. Additional growth opportunities are international expansion, commercial credit decision making and personal credit score monitoring. We believe the company is a compelling value at twelve times our four dollar per share estimate of earnings power.