Steven Romick Sells CVS, Buys United Technologies

Express Script, Esterline Technologies and Thermo Fisher Scientific among his largest trades

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Oct 27, 2015
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Steven Romick (Trades, Portfolio) is the portfolio manager of FPA Crescent Fund, a Los Angeles-based money management firm practicing a disciplined approach to value investing, prudently seeking superior long-term returns while maintaining a focus on capital preservation.

He manages a portfolio of 59 stocks with a total value of $9,351 million and the following are the most weighted trades during the third quarter .

He reduced his stake in CVS Health Corp. (CVS) by 87.77% and with an impact of 3.67% on the portfolio.

The company is an integrated pharmacy health care provider in the United States. It has three segments: Pharmacy Services, Retail Pharmacy and Corporate.

CVS Health Corp. reported an increase of 7.4% for net revenue and an increase of 2.5% for operating profit compared to the second quarter of a year before.

The stock is trading with a P/E ratio of 24.88 and has been as high as $113.65 and as low as $81.37 in the past year. It is currently 8.96% below its 52-week high and 27.16% above its 52-week low. According to the DCF calculator, at the current price of $103.47 the company looks overpriced by 44%.

Pioneer Investments is the company's leading shareholder among the firms with a stake of 0.49% of outstanding shares, followed by First Pacific Advisors (Trades, Portfolio) with 0.41% and Vanguard Health Care Fund (Trades, Portfolio) with 0.35%

Romick increased his stake in United Technologies Corp. (UTX) by 177.80% and with an impact of 3.18% on the portfolio.

The company provides high technology products and services to the building systems and aerospace industries worldwide. It conducts its business through five principal segments: Otis, UTC Climate, Controls and Security, Pratt & Whitney, UTC Aerospace Systems and Sikorsky.

For the second quarter sales decreased by 5%, reflecting the impact of adverse foreign exchange (four points) and absence of the prior year Sikorsky Canadian Maritime Helicopter Program adjustment (five points). The company posted an increase of 21% for operating profit compared to the prior year quarter.

The stock is trading with a P/E ratio of 14.34 and has been as high as $124.45 and as low as $85.50 in the past year. It is currently 19.46% below its 52-week high and 17.23% above its 52-week low. According to the DCF calculator, at the current price of $100.23 the company currently looks over priced by 16%.

Ken Fisher (Trades, Portfolio) with a stake of 0.92% of outstanding shares is the main guru holding shares of the company, followed by Steven Romick (Trades, Portfolio) with 0.59% and the firm Diamond Hill Capital (Trades, Portfolio) with 0.39%.

The investor reduced his stake in Express Scripts Holding Co. (ESRX) by 68.60% and with an impact of 2.48% on the portfolio.

The company operates as a Pharmacy benefit management in North America. It includes HMOs, health insurers, third-party administrators, employers, union-sponsored benefit plans, workers' compensation plans and government health programs. It helps health benefit providers address access and affordability concerns resulting from rising drug costs while helping to improve healthcare outcomes.

Express Scripts is pleased with the second quarter results and outperforming its guidance in which adjusted EBITDA was up by 3% and adjusted net income was up by 4%. During the second quarter the company received 55.1 million shares of its common stock.

The stock is trading with a P/E ratio of 27.98 and has been as high as $94.61 and as low as $68.06 in the past year. It is currently 9.81% below its 52-week high and 25.37% above its 52-week low. According to the DCF calculator, at the current price of $85.33 the company currently looks overpriced by 14%.

Dodge & Cox is the main hedge fund holding shares of the company with 4.13% of outstanding shares, followed by Chris Davis (Trades, Portfolio) with 1.92% and Jeremy Grantham (Trades, Portfolio) with 0.32%.

Romick bought 2,636,450 shares of Esterline Technologies (ESL) and the trade had an impact of 2.03% on his portfolio.

Esterline is a specialized manufacturing company mainly serving aerospace and defense customers. It designs, manufactures and markets highly engineered products. The company serves the aerospace and defense industry, mainly in the United States and Europe. It also serves the industrial/commercial and medical markets.

During the third quarter the company reported a decrease of 2% for consolidated revenue compared with the year-ago period; Esterline also posted a decrease of 2.8% for organic sales volume.

The stock is trading with a P/E ratio of 44.49 and has been as high as $120.71 and as low as $69.77 in the past year. It is currently 37.27% below its 52-week high and 8.53% above its 52-week low. According to the DCF calculator, at the current price of $75.72 the company currently looks overpriced by 10%.

The company's main shareholder among the gurus is the firm First Pacific Advisors (Trades, Portfolio) with 10.72% of outstanding shares, followed by Steven Romick (Trades, Portfolio) with 8.92% and Michael Dell (Trades, Portfolio) with 6.61%.

He reduced his stake in Thermo Fisher Scientific Inc. (TMO) by 44.19% and with an impact of 1.75% on the portfolio.

The company provides analytical instruments, equipment, reagents and consumables, software and services for research, manufacturing, analysis, discovery and diagnostics. It had another quarter of solid financial performance for the third quarter in which adjusted earnings per share (EPS) grew by 5% and adjusted operating margin expanded by 70 basis points to 22.6%.

The stock is trading with a P/E ratio of 26.01 and has been as high as $141.25 and as low as $115.14 in the past year. It is 10.07% below its 52-week high and 10.33% above its 52-week low. According to the DCF calculator, at the current price of $127.03 the company currently looks over priced by 23%.

Larry Robbins (Trades, Portfolio) is the company's leading shareholder among the gurus with a stake of 2.32% of outstanding shares, followed by the firms PRIMECAP Management (Trades, Portfolio) with 1.39% and First Pacific Advisors (Trades, Portfolio) with 0.87%.

He sold out his stake in Medtronic PLCÂ (MDT) with an impact of 1.44% on the portfolio.

The company is a medical technology company – alleviating pain, restoring health and extending life for millions of people around the world. The company functions in four operating segments that manufacture and sell device-based medical therapies: Cardiac and Vascular Group; Minimally Invasive Therapies Group; Restorative Therapies Group, and Diabetes Group.

For the fourth quarter and fiscal year 2015, worldwide revenue grew 7% on a comparable, constant currency basis; 60% as reported and it is the first quarter that reflects the combined results of Medtronic and Covidien.

The stock is trading with a P/E ratio of 30.62 and has been as high as $79.50 and as low as $55.54 in the past year. It is currently 8.49% below its 52-week high and 30.99% above its 52-week low. According to the DCF calculator, at the current price of $72.76 the company currently looks overpriced by 170%.

The company's leading shareholder among the gurus is James Barrow (Trades, Portfolio) with a stake of 2.24% of outstanding shares, followed by Vanguard Health Care Fund (Trades, Portfolio) with 1.34% and PRIMECAP Management (Trades, Portfolio) with 1.16%.