Steven Romick

Steven Romick

Last Update: 01-13-2015
Related: First Pacific Advisors
Robert Rodriguez

Number of Stocks: 66
Number of New Stocks: 11

Total Value: $11,030 Mil
Q/Q Turnover: 17%

Countries: USA GBR NOR FRA BEL ESP DEU MYS JPN
Details: Top Buys | Top Sales | Top Holdings  Embed:

Steven Romick Watch

  • A Look At Steven Romick's Investment in Yahoo!

    Steven Romick (Trades, Portfolio) is the portfolio manager of FPA Crescent Fund. As of Jan. 31, the fund has delivered more than 11% a year in average returns over the past 10 years. His fund has about $2.8 billion under management. Romick's portfolio consists of equity positions of both long and short. He also has sizeable positions in short term bond and cash. He seeks value in all parts of a company's capital structure, including common and preferred stocks, as well as corporate and convertible bonds. The manager invests in securities "that the consensus does not wish to own," searching for stocks and convertible bonds that reflect low price/earnings ratios (P/Es) and trade at discounts to private market value. Corporate bonds with yields substantially higher than those of government securities are also considered.


    Last quarter, he initiated a long position in Yahoo! (YHOO) by buying 3,409,200 shares. Yahoo's appears grossly undervalued. The company's stake in Alibaba (BABA) is worth ~$40 billion and Yahoo Japan is worth ~$7 billion. Yet Yahoo's market capitalization is just $42 billion, giving a negative value to its core business.

      


  • Analyzing Steven Romick's New Buys: Express Scripts (ESRX)

    Steven Romick (Trades, Portfolio) is the portfolio manager of FPA Crescent Fund. As of Jan. 31, the fund has delivered more than 11% a year in average over the past 10 years. His fund has about $2.8 billion under management. Romick's portfolio consists of equity positions of both long and short. He also has sizeable positions in short term bond and cash. He seeks value in all parts of a company's capital structure, including common and preferred stocks, as well as corporate and convertible bonds. The manager invests in securities "that the consensus does not wish to own," searching for stocks and convertible bonds that reflect low price/earnings ratios (P/Es) and trade at discounts to private market value. Corporate bonds with yields substantially higher than those of government securities are also considered.


    Last quarter, he initiated a long position in Express Scripts (ESRX) by buying 4,234,000 shares. It was the fund's largest buy last quarter. Here's a look at the company in detail.

      


  • Steven Romick Comments on United Technologies Corp

    UTX (UTX) is an example of such a business. As part of our research process, we look at a number of companies and industries each year. As you can tell from the fund’s relatively low turnover, most of that research does not result in a purchase or sale. We regularly nix potential investments because we find them too expensive or too difficult to understand. When we pass on investments solely due to valuation, we are left with “on deck” opportunities. These are companies that the group has thoroughly researched but decided that the price wasn’t attractive enough to warrant purchase. We keep track of these companies and patiently wait for the day when they become available at a price that represents good, long-term value. UTX was one such opportunity that presented itself during the short-lived market dip last October.


    UTX is an industrial conglomerate with leading positions in aerospace systems, aerospace engines (Pratt & Whitney), helicopters (Sikorsky), elevators (Otis), climate control (Carrier) and fire/security systems. Each division is a leader in its respective field and features important long-term competitive advantages. UTX generates roughly 50% of its profits from aerospace and 50% from commercial buildings. The strength of the operating businesses has allowed UTX to earn an average return on invested capital in the mid 20’s through the recent economic cycle (i.e., the last 6 years).

      


  • Steven Romick's FPA Crescent Fund Fourth Quarter 2014 Commentary

    You should consider the Fund’s investment objectives, risks, and charges and expenses carefully before you invest. The Prospectus details the Fund's objective and policies, sales charges, and other matters of interest to the prospective investor. Please read this Prospectus carefully before investing. The Prospectus may be obtained by visiting the website at www.fpafunds.com, by email at crm@fpafunds.com, toll-free by calling 1- 800-982-4372 or by contacting the Fund in writing.


    Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. This data represents past performance and investors should understand that investment returns and principal values fluctuate, so that when you redeem your investment it may be worth more or less than its original cost. Current month-end performance data may be obtained by calling toll-free, 1-800-982-4372.

      


  • Fourth Quarter 2014 Crescent Fund Update

    Activity:


    o Sold out of Carefusion (CFN), Checkpoint Software, Johnson & Johnson (JNJ) and Wellpoint. Trimmed CVS, Intel and Norsk Hydro.

      


  • Steven Romick's International Buys in Q4

    During the fourth quarter, Steven Romick (Trades, Portfolio) of FPA Crescent Fund purchased four new international stocks, bringing the total number of international positions to 19.


    The fund’s fact sheet states that about 65% of the portfolio’s assets are in the U.S., followed by 29.7% in Europe, and 3% in emerging markets.

      


  • Steven Romick Shorts Alibaba, Medtronic in Q4

    Steven Romick (Trades, Portfolio) is the portfolio manager of the long-short FPA Crescent Fund. During the fourth quarter, Romick shorted four additional positions, bringing the fund’s total number of short positions to 29.

    In a 2009 interview with Forbes, Romick said he views shorts as absolute opportunities.  


  • Steven Romick Buys 7 US and International Stocks in Q4

    Steven Romick (Trades, Portfolio), a value-minded investment manager of the FPA Crescent Fund (FPACX), found just as many attractive stocks outside the U.S. as within it in the fourth quarter.


    Romick purchased seven new holdings in total, according to his portfolio released Tuesday: Express Scripts (ESRX), United Technologies Corp (UTX), Carlsberg AS (OCSE:CARL B), Yahoo! Inc. (YHOO), Sulzer AG (XSWX:SUN), Sberbank of Russia (LSE:SBER) and Sberbank of Russia (MIC:SBERP).

      


  • Battle of the Gurus: David Dreman Vs. Steven Romick

    Investors can learn about investing from examining the strategies used by the most successful investors in the world. Studying their past picks can help us understand what works and what does not work in investing. It is important to identify the mistakes of great investors too; this is how we learn without losing our own money. Today we examine Pitney Bowes, a 1-Star Business Predictability ranked provider of “mail processing equipment and integrated mail solutions.”


      


  • Steven Romick Buys One Stock in Q3, Headquartered in South Africa

    Steven Romick (Trades, Portfolio), manager of the FPA Crescent Fund, quieted down his stock purchasing in the third quarter, buying only one new stock after adding 10 new names to the portfolio in the second quarter.


    The FPA Crescent fund contains 64 stock positions in total and is valued at $9.8 billion.

      


  • Steven Romick Comments on Naspers And Tencent

    Naspers (JSE:NPN) is a South African holding company with a global portfolio of media and technology investments. Naspers has a 34% equity stake in Tencent (HKSE:00700), a Chinese internet company most known for its QQ instant messaging platform with over 800 million active users. The market values Naspers’s stake in Tencent at ~$48 billion but the parent company at just ~$45 billion. Going long Naspers and shorting a proportionate number of Tencent shares effectively allows us to create a Naspers “stub” at a negative $3 billion valuation. We feel Naspers is worth substantively more, even after tax-affecting for a disposition of Tencent. Better yet, at today’s prices the market is paying us to own Naspers ex-Tencent.


    The Naspers stub includes the leading South African Pay TV company MultiChoice, which has a more than 90% market share not to mention several Pay TV operations across Sub-Saharan Africa that have long-term subscriber growth potential resulting from increased Pay TV penetration. Naspers owns, as well, a major publisher of magazines and newspapers primarily sold in South Africa. The cash flow of these assets continues to support Naspers’s portfolio of Internet/e-commerce investments, including several companies focused on emerging markets that could prove valuable.

      


  • Steven Romick's FPA Crescent Fund Q3 2014 Commentary

    Dear Shareholders:


    The FPA Crescent Fund declined 0.96% in the third quarter but has risen 4.02% year-to-date. The S&P 500 returned 1.13% and 8.34% in the same periods, respectively. Our average risk exposure was 54.6% in the third quarter and 54.3% year-to-date.

      


  • Steven Romick's FPA Crescent Q3 Commentary

    Introduction Is the market finally correcting the recent excesses of stock valuations, particularly in the small-mid-cap area? The admittedly arbitrary definition of a stock market correction is when an index declines 10% or more from its recent level. Based on this, the Russell 2000 (R2000) recently fell into correction territory while the S&P 500 has declined 9% over the past month (as of 10/14/14). Moreover, the Russell Microcap Index is down more than 17% from its high earlier this year, with microcap technology stocks down nearly 25% since March. Thus, small-cap stock valuations, relative to large-cap valuations, are in the process of reverting back toward historical averages. In some ways, the smaller decline in the S&P 500 has masked the broader correction for a number of industry sectors. Besides those mentioned above, large-cap automotive stocks are down 18% since July, and energy stocks are also getting hit with the S&P Oil & Gas Exploration & Production index down 25% since this past summer. While your portfolio is not immune to this correction, we believe the companies we own have strong balance sheets, providing management teams an ability to take advantage of any good opportunities to buy assets on the cheap – should any opportunities present themselves. We have managed this strategy through a number of corrections and each time, while we take temporary hits to capital, we have been able to take advantage of opportunities that present themselves during these periods of dislocation. Our strategy’s three-decades of history shows that we can deploy capital very rapidly when valuations are depressed and when fear and uncertainty are high. On the other hand, we have exhibited tremendous patience in holding higher than normal levels of liquidity when valuations are rich. The last couple of years tested our patience, but we were fortunate to have discovered stocks that still met our stringent investment criteria and deployed some of your capital into these new investment opportunities. In recent weeks we deployed incremental capital as selling pressure accelerated. If the current volatility continues, we fully expect that we will be more aggressive in deploying your capital as valuations become even more attractive.


    Market Commentary

      


  • Logic Makes Steven Romick Skeptical Sometimes


    “Incompetence is the disease of idiots. Overconfidence is the mistake of experts. Incompetence irritates me. Overconfidence terrifies me.” – Canadian journalist Malcolm Gladwell

      


  • Steven Romick Increases Positions, Russian Oil Companies in Q3

    Manager of FPA Capital’s Crescent Fund Steven Romick (Trades, Portfolio) is skeptical of today’s market, as he explained in his shareholder letter and demonstrated in refusing to buy new stocks in the third quarter.  


  • TE Connectivity Is Going to Double Revenue Growth

    In this article, let's take a look at TE Connectivity Ltd (TEL), a $24.74 billion market cap company, which is a company which designs, manufactures and markets engineered electronic components and network solutions for the automotive, appliances, aerospace and defense, telecommunications, computers and consumer electronics industries.


    Leading positions

      


  • Steven Romick Comments on Alcoa And Norsk Hydro

    We initiated positions in two aluminum companies last fall, Alcoa (AA) and Norsk Hydro (OSL:NHY), that we saw as commercial opportunities or, as we like to call them, “3 to 1s”, i.e., 3x the perceived upside to its downside. The oversimplified and bigger picture view was that we saw the price of aluminum was at an inflation-adjusted low and the stock prices of these companies were down in kind, as can be seen in the following graphs.


      


  • Steven Romick Comments on Jardine Matheson And Jardine Strategic

    Crescent Co-Portfolio Manager Mark Landecker profiled our investment in the “Jardines” at our FPA Investor Day. These Hong Kong-based holding companies can trace their roots back to 1832 and the founding family remains in control and continues to manage and shepherd the growth of these sister entities.


    About 80% of the value of our estimate of the net asset value (NAV) of the Jardines is comprised of the following listed companies: HK Land, Mandarin Oriental Hotels, Dairy Farm, Jardine Lloyd Thompson and Astra. We discussed the merits of the largest of these businesses at our recent Investor Day.

      


  • Steven Romick's Q2 FPA Crescent Fund Shareholder Letter

    Dear Shareholders:


    Nothing seems to slow this stock market in overdrive. The S&P 500 returned 5.23% in the second quarter and 7.14% year-to-date. The FPA Crescent Fund returned 2.94% and 5.04% for the same periods, albeit with an average net exposure to equities in the low 50% range.

      


  • Steven Romick Returns to Buying Stocks: Top 5 Purchases

    Famously patient and conservative investor Steven Romick (Trades, Portfolio) of the FPA Crescent Fund bought 12 new stocks in the second quarter after staying out of the game in the first. Central bank policies and few companies trading at low multiples, among other factors, nudged him to the sidelines in the first three months of the year.

    In his first-quarter letter, Romick told investors:  


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