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Mairs & Power Getting Growth From Abroad

As stateside growth remains sluggish, Bill Frels and Mark Henneman--Morningstar's 2012 Domestic-Stock Fund Managers of the Year--note that some of their top long-term holdings are going beyond boundaries.

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David Falkof: Let's talk about some of the top performers this year, why the fund did so well. One of the top holdings, Valspar, is a Minnesota-based company and very good long-term performer, and particularly this past year.

Bill Frels: Fortunately, Valspar was one of our larger holdings and then became the largest holding in the fund because of significantly better-than-expected performance. We certainly weren't looking for the performance that Valspar eventually gave us over the course of the year, even though we've owned the company for quite a few years and have had management into our office. We have made visits there on a number of occasions, and we are very familiar with it. But Valspar did some things establishing their Valspar-branded paint and also margin improvements. And I think some of their markets turned out to be a little stronger than many had expected earlier in the year, and despite a pretty lackluster economy, they were able to really show strong relative earnings performance, which gets investors' attention pretty quickly these days.

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David Falkof does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.