Why did you buy that stock? [Mainfreight Ltd]

The series on why I bought a particular stock continues with a big favorite of mine, Mainfreight Ltd [MFT.NZ] .It is a particular fav because I see it as New Zealand's best run listed company. Many would disagree with that statement but I would challenge anyone to tell me why this might be a figment of my imagination or at least partly exaggerated, which I am sometimes prone to do.

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If you haven't guessed so far dear reader the main reason I bought this stock was the excellent management of the company. Bruce Plested, Executive chairman, and Don Braid, CEO, are masters of their industry and have a clear plan as to where the company is going and how they are going to get there.

To put it bluntly, communication to their employees, customers and investors is sans any bullshit and I like that. They are clear precise managers who achieve company goals with little fuss and fanfare and no excuses if they fail, which they rarely do.

This management style is copied across the countries in which they operate and local managers are able to make their local operations their own, even though they are part of a much larger exercise. Once again this focus on good management is the main reason for company success and the carrot that got me hooked.

In a related matter, I also like the company "culture" that management have fostered in their employees. Respect for employees by management is clearly apparent and this makes for a happy and more productive workforce.

Mainfreight is another easy to understand business, they are a logistics company, that is, they transport freight . Easy. They have a diversified business but have stayed within their area of expertise even when they have expanded in overseas territories.

Other companies that stray way from their core area of business knowledge always come off second best. Try to avoid buying such a company if you can. The risks to your wallet become much higher.

Mainfreight is the third largest holding in my portfolio, in terms of the purchase price,which I may have initially overpaid for, and I have had ownership in the company for just over 2 years now and am still very happy with company performance. I would buy more today at any share price weakness.

In my humble opinion, I believe that Mainfreight would fit the investment criteria of Warren Buffett and if the share price was cheap enough and he knew or cared where New Zealand was, he would drop his ukulele and snap it up in a heartbeat!


Mainfreight @ Share Investor

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The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
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