Steven Romick is the portfolio manager of First Pacific Advisors Crescent Fund. The fund’s investment objective and strategy reports that they “seek to generate equity-like returns over the long-term, take less risk than the market and avoid permanent impairment of capital.”
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Over the fourth quarter Romick purchased seven new stocks and sold out of six. The guru’s portfolio currently holds 51 stocks valued at over $8.24 billion. The following five companies represent Romick’s top five stock holdings as of the close of the fourth quarter.
Microsoft (MSFT)
Romick’s largest position this quarter is in Microsoft. The guru holds on to 15,013,700 shares of the company’s stock, representing 6.1% of his total portfolio and 0.18% of the company’s shares outstanding.
The guru did not alter his holdings in Microsoft over the duration of the fourth quarter. Since his initial buy of Microsoft stock in the third quarter of 2010, Romick has seen average gains of 27% on shares bought.
Steven Romick’s holding history as of the fourth quarter:
Microsoft generates revenue by developing, manufacturing, licensing and supporting a wide range of software products and services for many different types of computing devices.
Microsoft’s historical revenue and net income:
The current top three guru shareholders of Microsoft:
· Dodge & Cox: 86,524,349 shares, representing 1.04% of the company’s shares outstanding and 3.2% of their total portfolio.
· Jeff Ubben: 66,865,530 shares, representing 0.8% of the company’s shares outstanding and 20.1% of his total portfolio.
· PRIMECAP Management: 62,747,091 shares, representing 0.75% of the company’s shares outstanding and 2.7% of its total assets managed..
The analysis on Microsoft reports that the price is near a 10-year high, its interest coverage is comfortable and it has shown predictable revenue and earnings growth.
The Peter Lynch Chart suggests that the company is currently undervalued:
Microsoft has a market cap of $298.61 billion. Its shares are currently trading at around $35.77 with a P/E ratio of 13.20, a P/S ratio of 3.70 and a P/B ratio of 3.70. The company had an annual average earnings growth of 12.50% over the past ten years.
GuruFocus rated Microsoft the business predictability rank of 3-star.
Oracle (ORCL)
Romick’s second largest holding is in Oracle Corporation. The guru holds on to 13,305,200 shares of the company’s stock, representing 6.2% of his total portfolio and 0.29% of the company’s shares outstanding.
During the fourth quarter Romick upped his stake 25.82% by purchasing a total of 2,730,200 shares. He bought these shares in the Q4 price range of $32.19 to $38.26, with an estimated average quarterly price of $34.38 per share. Since then the price per share has increased approximately 10.9%.
Romick’s holding history as of the fourth quarter:
Oracle is a provider of enterprise software and a provider of computer hardware products and services. The Company provides technologies of cloud computing, including database and middleware as well as web-based applications.
Oracle’s historical revenue and net income:
The top three guru shareholders of Oracle:
· Jeremy Grantham: 49,839,220 shares, representing 1.08% of the company’s shares outstanding and 4% of his total portfolio.
· Meryl Witmer: 37,704,501 shares, representing 0.81% of the company’s shares outstanding and 6.2% of her total portfolio.
· PRIMECAP Management: 24,270,386 shares, representing 0.52% of the company’s shares outstanding and 1.1% of their total portfolio.
The analysis on Oracle reports that the revenue has slowed down over the past year, the operating margin is expanding, their dividend yield is at a 5-year high and their price is near a 10-year high.
The Peter Lynch Chart suggests that the company is currently overvalued:
Oracle Corporation has a market cap of $171.53 billion. Its shares are currently trading at around $38.14 with a P/E ratio of 16.30, a P/S ratio of 4.70 and a P/B ratio of 4.00. The company had an annual average earnings growth of 18.90% over the past ten years.
GuruFocus rated Oracle the business predictability rank of 4.5-star.
Aon PLC (AON)
Romick’s third largest stock holding goes to Aon PLC where he holds 5,755,000 shares. His position in the company represents 5.9% of his total portfolio and 1.87% of the company’s shares outstanding.
Over the past quarter Romick cut his holdings -7.91% by selling a total of 494,200 shares of the company’s stock. The guru sold these shares in the fourth quarter price range of $71.25 to $83.93, with an estimated average quarterly price of $79.22 per share. From this average the price per share has increased approximately 4.6%
Romick’s historical holding history:
Aon provides risk management & human capital consulting services, delivering distinctive client value via risk management solutions, including insurance & reinsurance brokerage and workforce productivity solutions.
Aon’s historical revenue and net income:
The top three guru shareholders of Aon PLC:
· Mason Hawkins: 10,629,235 shares, representing 3.46% of the company’s shares outstanding and 4.6% of his total portfolio.
· First Pacific Advisors: 6,849,900 shares, representing 2.23% of the company’s shares outstanding and 5.3% of their total assets managed.
· Steven Romick: 5,755,000 shares, representing 5.9% of the company’s shares outstanding and 1.87% of his total portfolio.
The analysis on Aon reports that the price is near a 10-year high, its operating margin is expanding and its P/E, P/S and P/B ratios are all trading near historical highs. The company has also issued $2 billion of debt over the past three years, but its debt level has been deemed acceptable.
The Peter Lynch Chart suggests that the company is currently overvalued:
Aon PLC has a market cap of $24.95 billion. Its shares are currently trading at around $82.88 with a P/E ratio of 24.70, a P/S ratio of 2.20 and a P/B ratio of 3.30. The company had an annual average earnings growth of 24.20% over the past ten years.
CVS Caremark (CVS)
Romick’s fourth largest position is in CVS Caremark where the guru maintains a total of 6,805,000 shares of the company’s stock. His position makes up for 5.9% of his total portfolio and 0.55% of the company’s shares outstanding.
Steven Romick hasn’t altered his position in CVS since 2012Q4.
Romick’s historical holding history of CVS:
CVS Caremark provides pharmacy healthcare services in the U.S. It has three reportable business segments: Pharmacy Services, Retail Pharmacy and Corporate.
CVS Caremark’s historical revenue and net income:
CVS's revenue growth has recently beaten the industry average of 2.5%. Since last year, the company’s revenues have increased by 1.7%. CVS improved its earnings per share by 21.3% in the most recent quarter compared to the same quarter last year.
The top three guru shareholders of CVS:
· Chris Davis: 38,448,058 shares, representing 2.97% of the company’s shares outstanding and 5.4% of his total portfolio.
· First Pacific Advisors: 7,367,300 shares, representing 0.6% of the company’s shares outstanding and 4.3% of their total portfolio.
· Steven Romick: 6,805,000 shares, representing 0.55% of the company’s shares outstanding and 5.9% of his total portfolio.
The Peter Lynch Chart suggests that the company is currently overvalued:
CVS has a market cap of $81.52 billion. Its shares are currently trading at around $68.49 with a P/E ratio of 18.90, a P/S ratio of 0.70 and a P/B ratio of 2.20. The company had an annual average earnings growth of 13.50% over the past ten years.
GuruFocus rated CVS the business predictability rank of 4-star.
Thermo Fisher Scientific (TMO)
The guru’s fifth largest position is in Thermo Fisher Scientific where he holds on to 3,695,000 shares of the company’s stock, representing 5% of his total portfolio and 1.02% of the company’s shares outstanding.Â
The guru did not alter his position over the past quarter and he has not changed his holdings since the first quarter of 2013 when he added an additional 130,000 shares. Since the guru bought in to the company in the first quarter of 2011 he has seen average gains of 111% on shares bought.
Steven Romick (Trades, Portfolio)’s historical holding history of TMO:
The company enables customers to make the world healthier, cleaner and safer by providing analytical instruments, equipment, reagents and consumables, software and services for research, manufacturing, analysis, discovery and diagnostics.
Thermo Fisher’s historical revenue and earnings growth:
The analysis on Thermo Fisher Scientific reports that the company has shown predictable revenue and earnings growth, its operating margin is expanding and its price is trading at around its 10-year high.
The Peter Lynch Chart suggests that the company is currently overvalued:
Thermo Fisher Scientific has a market cap of $41.47 billion. Its shares are trading at around 114.76 with a P/E ratio of 31.90, a P/S ratio of 3.20 and a P/B ratio of 2.50. The company had an annual average earnings growth of 15.50% over the past ten years.
GuruFocus rated Thermo Fisher the business predictability rank of 4-star.
Check out Steven Romick’s entire fourth quarter portfolio here.
