Vitesco Technologies Group (XTER:VTSC, Financial) (Germany), formerly Continental’s powertrain division, spun off from Continental in September. Although the Oakmark International Small Cap Fund does not hold a position in Continental, the Oakmark International Fund and the Oakmark Global Fund do. Following the corporate action, we determined that Vitesco met our investment criteria and initiated a position in the Oakmark International Small Cap Fund. Vitesco has benefited from the increasing pace of automotive electrification in Europe, which has boosted sales and improved the margins of the electrification technology segment. We think the company is positioned to grow significantly and that the stock is underpriced compared to our estimate of its intrinsic value.
From David Herro (Trades, Portfolio)'s Oakmark Intl Small Cap (Trades, Portfolio) Fund third-quarter 2021 commentary.
