Oakmark Funds, an investment management firm, published its “Oakmark Fund” second quarter 2022 investor letter – a copy that can be downloaded here. The Oakmark Fund returned -17.8% during the second quarter, underperforming the S&P 500 Index’s return of -16.1%. In constructing portfolios for its clients, the fund seeks out companies that it believes are trading in the market at significant discounts to their underlying value. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, Oakmark Fund mentioned Parker-Hannifin Corporation (NYSE:PH) and explained its insights for the company. Founded in 1917, Parker-Hannifin Corporation (NYSE:PH) is a Cleveland, Ohio-based diversified manufacturer with a $34.0 billion market capitalization. Parker-Hannifin Corporation (NYSE:PH) delivered a -16.64% return since the beginning of the year, while its 12-month returns are down by -13.10%. The stock closed at $265.19 per share on July 20, 2022.
Here is what Oakmark Fund has to say about Parker-Hannifin Corporation (NYSE:PH) in its Q2 2022 investor letter:
“A former long-time holding, Parker Hannifin (NYSE:PH) made its way back into the Fund this quarter. We believe investors’ perception of the company as a short-cycle, diversified manufacturer that’s heavily tied to industrial production has become stale. Since becoming CEO in 2015, Thomas Williams has vastly improved operations and shifted the portfolio to a longer cycle, higher growth, and higher return end markets. With the expected closing of the Meggitt acquisition this calendar year, Parker Hannifin’s highly depressing aerospace segment will become its largest end market. We anticipate a rebound in aerospace revenue, which combined with the company’s strong position in attractive businesses like clean energy technologies and factory automation-should further accelerate revenue growth. Parker Hannifin trades at a discount to other high-quality industrials, which we believe is unwarranted since its growth and returns should be as good or better than peers. At 12x next year’s cash earnings, Parker Hannifin is an attractive investment, in our view.”
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Our calculations show that Parker-Hannifin Corporation (NYSE:PH) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Parker-Hannifin Corporation (NYSE:PH) was in 39 hedge fund portfolios at the end of the second quarter of 2022, compared to 39 funds in the previous quarter. Parker-Hannifin Corporation (NYSE:PH) delivered a -8.38% return in the past 3 months.
In April 2021, we also shared another hedge fund’s views on Parker-Hannifin Corporation (NYSE:PH) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.
Disclosure: None. This article is originally published at Insider Monkey.
