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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.

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