Eurasia Drilling Co. Ltd. (LSE:EDCL), a provider of drilling services to the oil and gas industry,is the Fund's only Russia-related holding and was the largest detractor from performance for the quarter. Through our bottom-up due diligence process, we often find attractive companies like Eurasia Drilling that are generating excellent returns on capital through innovative approaches to their markets, paying generous dividends and looking confidently into the future. These are the kinds of companies we have a history of investing in. However, at some point even the best companies can become difficult investments when they must contend with a consistently depreciating currency on the back of a slowing macroeconomic environment. When the Russian economy slowed to near-zero growth in 2013, we began to see diminishing pricing power as the company struggled to offset cost inflation—a typical sign of an economy beginning to face challenges. Eurasia Drilling also lost its second largest customer, but management was able to redeploy all of those assets with minimal impact to earnings. We have adjusted our position accordingly, reducing our weight as we see an increasingly difficult road ahead for even world-class companies in such a challenging macro environment. We are still optimistic about the company's long-term prospects and continue to hold the stock. Supporting our confidence is the company's decision to buy back up to $200 million of stock.From Wasatch International Growth (Trades, Portfolio) Fund's first quarter 2014 commentary.Also check out: Wasatch International Growth Undervalued Stocks Wasatch International Growth Top Growth Companies Wasatch International Growth High Yield stocks, and Stocks that Wasatch International Growth keeps buying
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