Steven Romick

Steven Romick

Last Update: 01-09-2017
Related: First Pacific Advisors
Robert Rodriguez

Number of Stocks: 50
Number of New Stocks: 0

Total Value: $9,481 Mil
Q/Q Turnover: 2%

Details: Top Buys | Top Sales | Top Holdings  Embed:

Steven Romick Watch

  • First Pacific Open Letter Urges Arconic to Support Elliott Management Changes

    February 6, 2017


  • Steven Romick Comments on Deere

    Take Deere (NYSE:DE), for example. A superior company long known for its wide range of high-quality agricultural equipment and leading U.S. market share, Deere has, nevertheless, not been immune to weaker farm economics. The U.S. has been challenged. Brazil has been horrible. What Deere hoped to accomplish in Eastern Europe changed when Putin’s troops marched into Crimea. Success in the low horsepower Indian market has been slow coming. Deere’s sales worldwide have declined almost 30% from their 2013 peak while earnings per share have plunged almost 50%. A chart of its stock price and earnings per share suggests something entirely different however. Its stock has hit a new, all-time high while earnings are back at 2010 levels. Where’s the margin of safety in the purchase of shares now trading at 21.8x trailing twelve month earnings?7 Deere’s mid-cycle earnings should be higher, which would make the normalized valuation not quite as dear but we miss when such companies would trade as if the bad times would last forever. We aren’t picking on Deere. There’s lots of stuff that crosses our desks that hasn’t made much sense.

    For a spell, the stock prices of some companies will defy logic but that won’t last forever. Eventually, fundamentals should prevail. In the interim, stock prices can trade anywhere. We hope to populate the Fund with quality companies whose current earnings fail to appropriately reflect longer-term prospects. Sadly, we’re finding a lot of Deeres out there, which explains that for as long as we can remember, we went an entire quarter (Q3 2016) without initiating a new position.

    From Steven Romick (Trades, Portfolio)'s FPA Crescent Fund fourth quarter 2016 shareholder letter.   

  • Steven Romick's FPA Crescent Fund 2016 Year-End Commentary

    Dear Shareholders:


  • Steven Romick Curbs Citigroup

    Contrarian defensive investor Steven Romick (Trades, Portfolio) slashed 2,027,020 shares of Citigroup Inc. (NYSE:C) from his portfolio during the fourth quarter. The trade had a -1.03% impact on his portfolio. Romick now holds 8,308,010 shares.


  • Steven Romick Spots Next Area of Investment Interest: Health Care

    At the $33.1 billion FPA Crescent Fund, widely followed stock manager Steven Romick (Trades, Portfolio) puts avoiding risk first, but he also embraces volatile markets to make steely buys of plummeting equities.

    His cash allocation of 35.7% as of Dec. 31 suggests he sees opportunities that meet his absolute value criteria ahead. The cash also position remains about on par with its level of 35.49% at third quarter-end, when he said in his shareholder letter that he felt “better off just doing nothing instead of putting new investment in the Fund.” The portfolio inactivity did not imply any slack in efforts to research companies to nab.


  • Steven Romick Cuts Halliburton in 4th Quarter

    Steven Romick (Trades, Portfolio), portfolio manager of the FPA Crescent Fund, invests in long / short equity positions and short-term bonds. During fourth-quarter 2016, the manager eliminated his position in Halliburton Co. (NYSE:HAL) and expanded positions in Yahoo Inc. (NASDAQ:YHOO) and Baidu Inc. (NASDAQ:BIDU).



  • Steven Romick's Best Investments of the Year

    Steven Romick (Trades, Portfolio) is the portfolio manager of FPA Crescent Fund. He manages a portfolio composed of 50 stocks with a total value of $9.337 billion. The following are the best performers of his investments this year.

    TD Ameritrade Holding Corp. (AMTD), with a market cap of $23.4 billion, has gained 32.2% year to date. The guru's stake represents 2.01% of his total assets.


  • 23 Questions With Adam Strauss of Appleseed Fund

    1. How and why did you get started investing? What is your background?

    My father was a lifelong value investor and most of my investing habits came from watching him invest and learning from him. He has always been a contrarian, as an investor and otherwise. He spent most of his career as a sell-side analyst for William Blair, a growth shop, despite his natural inclination as a value investor.


  • FPA Capital Trims Positions in Microsoft, Cisco, Oracle

    Robert L. Rodriguez, CFA, is the CEO of FPA Capital Fund. During the third quarter the fund’s largest sells were the following:

    Its stake in Arconic Inc. (ARNC) was reduced by 68.20% with an impact of -3.44% on the portfolio.


  • Aon: A Stock for Risky and Uncertain Times

    Aon PLC (NYSE:AON) is an insurance brokerage company and a consulting company. When the world gets riskier, other companies turn to insurance to offload some of that risk. When the world gets more uncertain, other companies turn to consultants for advice and solutions.

    The current environment suggests these should be good times for Aon, but its share price has dipped lately. Looking at a year-to-date chart indicates this is just another blip on the upward journey of the share price, or is it?


  • Regional US Banks Offer Strong Predictable Value

    Three regional banks, Bank of the Ozarks Inc. (NASDAQ:OZRK), Prosperity Bancshares Inc. (NYSE:PB)  and Signature Bank (NASDAQ:SBNY), have high predictability and trade below their 10-year median price-earnings ratio. With high profitability and strong upside potential, these companies offer strong value potential in the short term.

    Regional US banks have high number of undervalued companies based on P/E (ttm)


  • Steven Romick's FPA Crescent Fund 3rd Quarter Commentary

    Dear Shareholders:


  • Steven Romick's Top 3rd Quarter Buys

    Steven Romick (Trades, Portfolio) is the portfolio manager of FPA Crescent Fund and the following are the guru's top-performing stocks for the third quarter.

    Ally Financial Inc. (NYSE:ALLY)


  • Steven Romick Trims Microsoft Stake

    Guru and contrarian investor Steven Romick (TradesPortfolio) trimmed his stake in Microsoft (NASDAQ:MSFT) during the third quarter, removing 1,405,260 shares from his award-winning FPA Crescent Fund for an average price of $56.45. The trade has a -0.70% impact on Romick’s portfolio. He now owns 6,327,480 shares of Microsoft.

    Microsoft has a market cap of $449 billion, an enterprise value of $387.89 billion, a price-earnigns (P/E) ratio of 27.97 and a price-book (P/B) ratio of 6.24.


  • FPA Boosts Position in Esterline Technologies

    First Pacific Advisors (Trades, Portfolio) increased its position in Esterline Technologies Corp. (NYSE:ESL) on Sept. 16.

    In Esterline, the firm purchased 220 shares for an average price of $74.96 per share. The transaction increased its stake by 0.01% to 3,690,774 shares.


  • Steven Romick Slashes Genting Stake

    Steven Romick slashed 15,312,690 shares of Genting (XKLS:4715) from his portfolio at an average price of 4.43 Malaysian ringgit ($1.10) in the second quarter. The trade had a -0.19% impact on Romick’s portfolio. He now owns 41,441,930 shares in the company.

    Genting is a leisure and hospitality company that offers casinos, hotels and spas, restaurants and bars, as well as shows and events, and movie theaters. The company was incorporated on May 7, 1980, and has locations in Singapore, Malaysia, the Philippines and New York City.


  • Steven Romick Exits Carlsberg

    Steven Romick sold out his remaining 389,330 shares in Carlsberg (OCSE:CARL B) in the second quarter at an average price of 627.11 Danish krone ($94.01) per share.


  • Steven Romick's FPA Crescent Fund Second Quarter 2016 Commentary

    Dear Shareholders:


  • Steven Romick Reduces Stake in Henkel

    Steven Romick trimmed his stake in Henkel (XTER:HEN) by 11.83%, selling 151,340 shares in the second quarter.

    The company is headquartered in Düsseldorf, Germany, and it operates its business worldwide in three segments: Adhesive Technologies, Beauty Care and Laundry & Home Care.


  • Steven Romick Slashes Stake in Occidental Petroleum

    Guru Steven Romick slashed his stake in Occidental Petroleum Corp. (NYSE:OXY) during the second quarter. Romick sold 2,482,160 shares for an average price of $74.73. The trade had a -1.8% impact on his portfolio.

    Occidental Petroleum Corporation is an international oil and gas exploration and production company headquartered in Houston. The company provides its services internationally with operations in the U.S., Middle East and Latin America. Occidental is one of the largest U.S. oil and gas companies, based on equity market capitalization.


  • Steven Romick Made 4 New Buys and Increased 2 Positions in 2nd Quarter

    Steven Romick (Trades, Portfolio), portfolio manager of the FPA Crescent Fund, seeks long-term equity returns while avoiding permanent capital impairment and limiting the fund’s exposure to risk. An absolute value investor, Romick only invests in companies that offer absolute economic risk/reward propositions. The fund’s return since inception is 10.26%, which outperforms the Standard & Poor’s 500 index by about 1.3%. Additionally, Morningstar analysts gave FPA Crescent Fund a gold rating, praising the fund’s ability to sustain its capital gains during economic downturns.

    Currently, Romick’s fund contains 57.6% in common equity and 36.3% in cash. According to Morningstar analysis, the fund manager only invests in stocks trading at deep discounts, i.e., “substantial discounts to [the stocks’] economic growth.” During the second quarter, Romick made four new stock buys and increased his position in two other companies.


  • Steven Romick: Will Brexit Spark a Much-Needed Market Revaluation?

    Markets globally have reacted negatively to the British having voted to leave the European Union (EU) after more than four decades. The night before the vote, UK betting markets reflected that the “remain” camp was heavily favored to win. In a 2015 speech titled, “Don’t be Surprised,” I wrote that


  • Steven Romick Adds to Bank of America Stake

    Steven Romick added 5,850,370 shares to his stake in Bank of America Corporation (NYSE:BAC) in the first quarter.

    Bank of America is one of the world’s largest financial institutions, serving individual consumers, small- and middle-market businesses, institutional investors, large corporations and governments with a full range of banking, investing, asset management and other financial and risk management products and services. Through Bank of America’s banking and various nonbank subsidiaries throughout the U.S. and in international markets, it provides a diversified range of banking and nonbank financial services and products through five business segments: Consumer Banking, Global Wealth & Investment Management, Global Banking, Global Markets and Legacy Assets & Servicing with the remaining operations recorded in All Other.


  • First Pacific Advisors Invests in American Express, AIG, Alcoa

    Robert L. Rodriguez, CFA, is the chief executive officer of First Pacific Advisors (Trades, Portfolio) Capital, which bought shares in many companies in the first quarter:

    The fund raised its stake in CIT Group Inc. (CIT) by 120.20% with an impact of 1.98% on the portfolio.


  • Steven Romick Comments on Citigroup

    Our equity exposure to financials has increased to 20.5%, up from a net negative exposure in 2008 and higher than the S&P 500’s current weighting of 15.6%. We seek the inexpensive and care not a whit about market weightings. Financials, particularly lenders, meet that hurdle. Citigroup, as an example, traded down to ~60% of tangible equity at one point in the first quarter. We believe tangible equity is pretty solid, even after assuming a higher level of charge-offs. Investors will frequently act as if they are still fighting their last war but the balance sheets of U.S. banks and thrifts are far stronger now than they were in 2008 when many financial institutions were wounded and close to dying.

    On the eve of the global financial crisis, Citi (NYSE:C) had just 3% tangible equity propping up its tangible assets whereas today, it has 10.5%, higher by a factor of more than three. Some of Citi’s loans will default and it won’t get full recovery in all cases. When we stress test its balance sheet and assume an unusually bad outcome for its loan book, its capital ratios remain solid. If half of its China, energy and metals & mining loans were to default this year and Citi recovered just 40 cents on the dollar, and if consensus earnings are correct, then Citi would still earn money this year and end 2016 with more than $60 per share of tangible book value and tangible equity to tangible assets of more than 10%. That would mean book value would actually increase despite the write-offs. We, therefore, thought Citi at a 40% discount to its minimum worth was a great risk/reward. We purchased additional shares in the midst of its Q1 downturn along with shares of other lenders that saw similar declines.

    From Steven Romick (Trades, Portfolio)'s Crescent Fund first quarter commentary letter.   

  • Steven Romick's 1st Quarter Crescent Fund Commentary

    Dear Shareholders:


  • Steven Romick Keeps On Buying Cisco, American Express

    Steven Romick (Trades, Portfolio) is the portfolio manager of FPA Crescent Fund. As of Jan. 31, the fund had delivered more than 11% a year on average over the past 10 years. The following are the companies the investor has been buying for at least the last two quarters.

    Esterline Technologies Corp. (ESL)


  • Steven Romick Adds to Stake in Alcoa

    Guru Steven Romick added 6,932,590 shares to his stake in Alcoa Inc. (NYSE:AA) in the first quarter.

    Alcoa was founded nearly 128 years ago on Oct. 1,1888, as the Pittsburgh Reduction Company. The company was based on technology developed by Alcoa's co-founder, Charles Martin Hall.


  • Donald Yacktman Reduces Stake in Oracle

    Donald Yacktman (Trades, Portfolio) founded Yacktman Asset Management in 1992. Prior to this, he served as a senior portfolio manager at Selected Financial Services Inc.

    Yacktman is the co-manager for AMG Yacktman Focused Fund (Trades, Portfolio) and the award winning AMG Yacktman Fund (Trades, Portfolio). He was awarded the 1994 Portfolio Manager of the Year award by Mutual Fund Letter.


  • Steven Romick Doubles Down on American Express

    Contrarian value investor Steven Romick doubled down his holding in American Express (NYSE:AXP), adding 2,410,999 shares to his portfolio on March 31.

    American Express has a market cap of $58.5 billion, a P/E ratio of 12.06, an enterprise value of $86.61 billion and a dividend yield of 1.91.


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