FPA Capital Fund

FPA Capital Fund

Last Update: 04-16-2015
Related: First Pacific Advisors
Steven Romick

Number of Stocks: 25
Number of New Stocks: 2

Total Value: $798 Mil
Q/Q Turnover: 12%

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

FPA Capital Fund' s Profile & Performance

Profile

FPA Capital Fund has a concentrated portfolio and invest primarily in undervalued small to mid cap companies.

Robert Rodriquez has managed the FPA Capital Fund (FPPTX) and the FPA New Income Fund since the funds' inceptions in 1984. During his tenure, he has achieved an annualized return of 16.91% as of 9/30/2007. In the same period S&P 500 has returned 13.17% annually. Mr. Rodriguez is one of the few who warned investors about the financial crisis a few years earlier.

Web Page:http://www.fpafunds.com/

Investing Philosophy

FPA Capital Fund primarily invests in the stocks of smaller companies. He selects stocks based on specific fundamental criteria: strong balance sheets, free cash flow, an understandable and successful business strategy under capable management, and unique business characteristics. His purchases are concentrated in companies with relatively low Price/Normalized Earnings, low Price/Pretax Cash flow, low Price/Book Value, low Price/Replacement Value and low Market Cap/Total Revenues. Robert looks for companies with a track record of high returns on equity, and a long history. He sells stocks when the basis for investment has been revised, the stock is selling at a significant premium P/E to the market, profitability recovery has been attained, a management disappointment without expectation of recovery has occurred, or a superior alternative value has presented itself. His portfolio generally holds 25-45 equities. His investment outlook is typically 3-5 years, and he is not afraid to sit on the sidelines while waiting for the right opportunity.

Historical Allocation of Stock, Bonds, Cash

Total Holding History

Performance of FPA Capital Fund

YearReturn (%)S&P500 (%)Excess Gain (%)
2014-1.3113.69-15.0
201322.8532.39-9.5
20129.6916-6.3
3-Year Cumulative33 (10%/year)74.6 (20.4%/year)-41.6 (-10.4%/year)
20110.92.11-1.2
201024.2515.069.2
5-Year Cumulative66.7 (10.8%/year)105.1 (15.5%/year)-38.4 (-4.7%/year)
200953.7826.4627.3
2008-34.79-372.2
2007-0.395.49-5.9
20065.4215.79-10.4
200516.534.9111.6
10-Year Cumulative104.6 (7.4%/year)109.4 (7.7%/year)-4.8 (-0.3%/year)
200412.6210.881.7
200338.5428.689.9
2002-3.86-22.118.2
200138.13-11.8950.0
2000-3.08-9.16.0
15-Year Cumulative310.8 (9.9%/year)86.4 (4.2%/year)224.4 (5.7%/year)
199914.2421.04-6.8
1998-0.4228.58-29.0
199717.733.36-15.7
199637.7622.9614.8
199538.3937.580.8
20-Year Cumulative948.7 (12.5%/year)554.6 (9.8%/year)394.1 (2.7%/year)
199410.371.329.0
199316.7410.086.7
199221.577.6213.9
199164.5130.4734.0
1990-13.8-3.1-10.7
25-Year Cumulative2229.5 (13.4%/year)893.3 (9.6%/year)1336.2 (3.8%/year)
198924.331.69-7.4
198818.1116.611.5
198710.755.15.7
198612.5718.6-6.0
198528.9531.6-2.6
30-Year Cumulative5398.1 (14.3%/year)2402.2 (11.3%/year)2995.9 (3%/year)
198476.10.9

Top Ranked Articles

FPA Capital Fund Buys 2 New Stocks in Q4
The FPA Capital Fund (Trades, Portfolio) is a fundamental bottom-up, deep value strategy with 25 stocks in its long portfolio as of the end of the fourth quarter. Manager chose two new positions, according to the latest quarterly portfolio released today: Babcock & Wilcox Co. (BWC) and Cubic Corp (CUB). Read more...
FPA Capital Fund Comments on Apollo Education Group Inc
Apollo (APOL) and DeVry (DV) were both poor performers in the quarter. There is no other way to say it, the second quarter numbers for Apollo were very disappointing – particularly the enrollment numbers. APOL has spent a lot of money on a new Learning Management System (LMS) for all University of Phoenix (UoP) students. This was a massive endeavor on the company’s part and will lead to a large differentiation experience for their students versus the competition. Unfortunately, like many new large software rollouts, the LMS rollout had a couple of bugs that needed to be fixed. For example, if your internet browser was updated to a new version, some of the automation links within LMS were not properly coded and the user experience diminished to the point where some students dropped out of the university. APOL believes the majority of the problems have been addressed and fixed, but management took its eye off the ball with respect to converting prospective students to new enrollees during the past quarter. Management indicated that Read more...
FPA Capital Fund Comments on Helmerich & Payne Inc and Ensco PLC
During the first quarter of 2015, we swapped our position in Ensco (“ESV”) for Helmerich and Payne (HP) (“H&P”) because we believe they offered similar upside but H&P has less downside risk. H&P is the country’s biggest and most profitable onshore drilling contractor. At the time of our decision, H&P’s dividend yield was smaller (4.55% vs 10.37%) but it was still substantial and more secure than ESV’s dividend. Since our swap, Ensco cut its dividend exactly 80% (as of the end of the first quarter H&P yielded 4.04% vs 2.85% for ESV). We agree with ESV’s decision to cut its dividend. The market was not valuing the company based on this large dividend and there might be better ways to use those funds today such as buying back shares or purchasing distressed assets on the cheap. Read more...
FPA Capital Adds Two Stakes to Portfolio in First Quarter
The FPA Capital Fund (Trades, Portfolio) has a reputation for investing in smaller companies, and it lived up to that reputation with the two new buys it made in the first quarter of 2015 – Helmerich & Payne Inc (HP) and Dana Holding Corp (DAN). Read more...
FPA Capital Fund Buys Helmerich & Payne in Q1
The FPA Capital Fund (Trades, Portfolio) follows a deep value stock picking approach for the long term, with turnover averaging less than 20% over 20 years. Over the past 20 years, the fund has returned an average of 12.47%, slightly outperforming the Russell 2500 Index’s 11.21%. Read more...
» More FPA Capital Fund Articles

Commentaries and Stories

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FPA Capital Fund Comments on Apollo Education Group Inc
Apollo (APOL) and DeVry (DV) were both poor performers in the quarter. There is no other way to say it, the second quarter numbers for Apollo were very disappointing – particularly the enrollment numbers. APOL has spent a lot of money on a new Learning Management System (LMS) for all University of Phoenix (UoP) students. This was a massive endeavor on the company’s part and will lead to a large differentiation experience for their students versus the competition. Unfortunately, like many new large software rollouts, the LMS rollout had a couple of bugs that needed to be fixed. For example, if your internet browser was updated to a new version, some of the automation links within LMS were not properly coded and the user experience diminished to the point where some students dropped out of the university. APOL believes the majority of the problems have been addressed and fixed, but management took its eye off the ball with respect to converting prospective students to new enrollees during the past quarter. Management indicated that More...

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FPA Capital Fund Comments on Helmerich & Payne Inc and Ensco PLC
During the first quarter of 2015, we swapped our position in Ensco (“ESV”) for Helmerich and Payne (HP) (“H&P”) because we believe they offered similar upside but H&P has less downside risk. H&P is the country’s biggest and most profitable onshore drilling contractor. At the time of our decision, H&P’s dividend yield was smaller (4.55% vs 10.37%) but it was still substantial and more secure than ESV’s dividend. Since our swap, Ensco cut its dividend exactly 80% (as of the end of the first quarter H&P yielded 4.04% vs 2.85% for ESV). We agree with ESV’s decision to cut its dividend. The market was not valuing the company based on this large dividend and there might be better ways to use those funds today such as buying back shares or purchasing distressed assets on the cheap. More...

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FPA Capital Fund First Quarter 2015 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, 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 [email protected], toll-free by calling 1-800-982-4372 or by contacting the Fund in writing. More...

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FPA Capital Adds Two Stakes to Portfolio in First Quarter FPA Capital Fund - FPA Capital Adds Two Stakes To Portfolio In First Quarter
The FPA Capital Fund (Trades, Portfolio) has a reputation for investing in smaller companies, and it lived up to that reputation with the two new buys it made in the first quarter of 2015 – Helmerich & Payne Inc (HP) and Dana Holding Corp (DAN). More...

STOCKS, NEW BUYS


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FPA Capital Fund Buys Helmerich & Payne in Q1 FPA Capital Fund - FPA Capital Fund Buys Helmerich & Payne In Q1
The FPA Capital Fund (Trades, Portfolio) follows a deep value stock picking approach for the long term, with turnover averaging less than 20% over 20 years. Over the past 20 years, the fund has returned an average of 12.47%, slightly outperforming the Russell 2500 Index’s 11.21%. More...

FPA CAPITAL FUND, HELMERICH & PAYNE


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FPA Capital Fund Comments on InterDigital Inc
Looking beyond the poor performance of the energy stocks in the quarter and consistent with our investment strategy, we trimmed back two companies, Apollo Education (APOL) and InterDigital (IDCC). InterDigital creates and designs different wireless technologies and then licenses those patents to hardware manufacturers. Apollo provides on-line educational services and grants Bachelor and post- graduate degrees through its For-profit schools. More...

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FPA Capital Fund Comments on Apollo Education Group Inc
Looking beyond the poor performance of the energy stocks in the quarter and consistent with our investment strategy, we trimmed back two companies, Apollo Education (APOL) and InterDigital (IDCC). InterDigital creates and designs different wireless technologies and then licenses those patents to hardware manufacturers. Apollo provides on-line educational services and grants Bachelor and post- graduate degrees through its For-profit schools. More...

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FPA Capital Fund Comments on Rosetta Resources Inc
Let us now discuss Rosetta Resources (ROSE). ROSE is an exploration & production company that generates approximately 90% of its production from the Eagle Ford Shale basin in southwest Texas and the remaining production from the Permian basin in west Texas. The Fund has owned various amounts of ROSE over the past eight years, with its peak share count occurring on or around the financial crisis when oil prices were similar to the current level. The Fund’s share count troughed at the end of 2013 at approximately 77% less than the peak share count and when oil prices were around the $100 level. More...

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FPA Capital Fund Comments on Atwood Oceanics Inc
Atwood Oceanics (ATW) is an offshore drilling contractor. They have been an industry leader in utilization rates, profit margins, and returns on capital for years, and they have been profitable 19 of the last 20 years. Our thesis for purchasing the stock was that the company had almost completely renewed its fleet over the last few years and signed those rigs to contracts that gave it one of the biggest backlogs in the industry. We are currently modeling in our Base Case that 98/77/36% of the total revenue we expect them to generate in FY2015/16/17 is already under contract. We believed the culture and business practices behind the company’s peer-leading efficiencies would allow them to convert that backlog into substantial profits and initiate a meaningful dividend, which they recently implemented ($1/share per year). More...

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FPA Capital Fourth Quarter 2014 Letter
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FPA Capital Fund Adds Two New Technology Stocks to the Portfolio
FPA Capital Fund (Trades, Portfolio) recently added two new stocks to its portfolio valued at $8.82 billion. The portfolio now has a total of 25 stocks. More...

TECHNOLOGY STOCKS


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FPA Capital Fund Buys 2 New Stocks in Q4 FPA Capital Fund - FPA Capital Fund Buys 2 New Stocks In Q4
The FPA Capital Fund (Trades, Portfolio) is a fundamental bottom-up, deep value strategy with 25 stocks in its long portfolio as of the end of the fourth quarter. Manager chose two new positions, according to the latest quarterly portfolio released today: Babcock & Wilcox Co. (BWC) and Cubic Corp (CUB). More...

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Weekly 3-Year Low Highlights: RYN, ATW, PGH, AIXG
According to GuruFocus list of 3-year lows, Rayonier Inc, Atwood Oceanics Inc, Pengrowth Energy Corp, and Aixtron SE have all reached their 3-year lows. More...

WEEKLY, 3, YEAR, LOW, HIGHLIGHTS


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FPA Capital Fund Comments on SM Energy
Another energy company that declined substantially during the last few months is SM Energy (SM). Again, the strategy initially purchased SM Energy in late 2008/early 2009 at substantially lower prices than even its currently depressed price. SM is an exploration & production company that derives approximately 75% of its production from Texas (primarily the Eagle Ford Shale area), 15% from the Rocky Mountain region (primarily Bakken/Three Forks area in North Dakota), and the remainder split between the Permian Basin in west Texas and the Mid-Continent in Oklahoma. More...

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FPA Capital Fund Comments on Rowan Companies
Let us now discuss some of our energy investments. Rowan Companies (RDC) is an off-shore drilling rig owner and operator. RDC provides offshore oil and gas contract drilling services utilizing a fleet of 30 self- elevating mobile offshore “jack-up” drilling units and four ultra-deepwater drillships, two of which are currently under construction. Until this year, Rowan focused on high-specification and premium jack-up rigs, which its customers use for exploratory and development oil & gas drilling. A couple of years ago, RDC signed contracts with Hyundai Heavy Industries for the construction of four ultra-deepwater drillships. In January 2014, the company took delivery of the first of these drillships, the Rowan Renaissance. The Renaissance commenced drilling operations under a three-year contract in the deep waters off the coast of West Africa in April 2014. The last of the four new drillships will be delivered in March of 2015, and all four of the new ships are under firm, multi-year contracts. More...

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FPA Capital Fund Q3 2014 Commentary
Introduction More...

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Why Gurus Are Buying AGCO?
Martin Whitman of Third Avenue Value Fund added 253,642 shares of AGCO Corp (AGCO) at an average price of $53.6. More...

LONG, FARM & CONSTRUCTION MACHINERY


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FPA Capital Fund Comments on Cimarex Energy
Among the stocks we reduced in the quarter was Cimarex Energy (XEC). XEC is an Oil & Gas Exploration and Production company located in Denver, Colorado. Yet the company’s energy assets are primarily located in Oklahoma and Texas, with some acreage in New Mexico as well. XEC closed at a shade over $143 at the end of June and has appreciated more than 36% year-to-date. More...

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FPA Capital Fund Comments on Atwood Oceanics
We added to a number of existing positions in the quarter and started one new position, which is too small of a position to talk about at this point. Among the stocks that we added to in the quarter were Atwood Oceanics (ATW) and Titan International (TWI). More...

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Melissawilliam09
ReplyMelissawilliam09 - 1 week ago
I can see your full investment in this brilliant post. Watching and off course learning from it.

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