Steven Romick

FPA Crescent Fund

Last Update: 2013-04-12

Number of Stocks: 57
Number of New Stocks: 2

Total Value: $6,348 Mil
Q/Q Turnover: 2%

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Steven Romick's Profile & Performance

Profile

Steven Romick 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

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

Investing Philosophy

Mr. 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.

During his shareholder conference call, Steven Romick of FPA Crescent Fund shared what matrices he uses to measure the valuations of stocks and bonds. Not surprisingly, as a long term investor, Steven Romick looks at long term market valuation parameter Shiller P/E for market valuations. This is a screenshot of his Schiller P/E page:

This is clearly similar to what GuruFocus Shiller P/E page looks like. Shiller P/E ratio is updated daily. Today it sits at 20.1, which is 22.6% higher than the historical mean of 16.4, implying a future market return of 3.8% a year.

But Steven Romick is seeing opportunities in large cap high quality companies. He thinks that those companies have higher return on capital, and with relatively low valuations.

With bonds, Steven Romick looks the spread between Merrill Lynch High Yield Index vs. average of 5 & 10 year US Treasury yields. His slide is below:

Currently he is not yet excited with bonds, as he generally looks for better yield.

By the way, in the conference call, Steven Romick mentioned that a few years ago he was a one-man shop. Today he has a team of 10 analysts. A disclosure here, when he was a one-man shop, Steven Romick was a Premium Member of GuruFocus.

Total Holding History

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Performance of FPA Crescent Fund

Year	Return (%)	S&P500 (%)	Excess Gain (%)
2012	10.33	15.4	-5.1
2011	3.02	2.08	0.9
2010	12.04	15.06	-3.0
3-Year Cumulative	27.3 (8.4%/year)	35.5 (10.7%/year)	-8.2 (-2.3%/year)
2009	28.37	26.46	1.9
2008	-20.55	-37	16.5
5-Year Cumulative	29.9 (5.4%/year)	8 (1.5%/year)	21.9 (3.9%/year)
2007	6.84	5.61	1.2
2006	12.43	15.79	-3.4
2005	10.83	4.91	5.9
2004	10.21	12	-1.8
2003	26.15	28.7	-2.6
10-Year Cumulative	140.4 (9.2%/year)	99.7 (7.2%/year)	40.7 (2%/year)
2002	3.71	-22.1	25.8
2001	36.14	-11.9	48.0
2000	3.59	-9.1	12.7
1999	-6.28	21	-27.3
1998	2.79	28.6	-25.8
15-Year Cumulative	238.7 (8.5%/year)	93.8 (4.5%/year)	144.9 (4%/year)
1997	21.95	33.4	-11.5
1996	22.88	23	-0.1
1995	26.04	37.6	-11.6
1994	4.22	1.3	2.9

Commentaries and Stories

Currently 3.80/5

Rating: 3.8/5 (5 votes)

Steve Romick's FPA Crescent Fund Q1 2013 Commentary

April 24, 2013

Overview: We may be in a new year, but not much else in the financial world has changed: interest rates remain low, investors still lack yield alternatives and global economic news has been, at best, neutral. This has all pushed the stock market higher. The S&P 500 returned 10.61% in 2013’s first quarter, while bonds1 returned -0.12%, and the FPA Crescent Fund returned 7.22%. More...

Currently 3.75/5

Rating: 3.8/5 (4 votes)

Forbes Interviews Deep Value Investor Steven Romick

April 17, 2013

Accomplished fund investor Steven Romick actually started out to be a teacher and took education in college. According to him, at some point he took a left turn when he should have gone right and ended up becoming an investment manager. Get a peek at what's inside FPA Crescent Funds' portfolio as the esteemed fund manager shares team building insights and sector investment methodology. Plus, Romick explains why farming is like edible gold. More...

Currently 5.00/5

Rating: 5.0/5 (2 votes)

FPA Crescent Fund Steven Romick's First Quarter Sells

April 11, 2013

The "Great Investor" Steven Romick, Investment Officer of the First Pacific Advisor’s Crescent Fund, was actively selling in first quarter 2013. Romick’s Crescent Fund is currently valued at $6.1 billion and holds 57 stocks, two of them new. The fund has a quarter-over-quarter turnover of 2%. Guru Steven Romick is in the top 1% of money managers. More...

DATA STORAGE, OIL & GAS DRILLING, INSURANCE - PROPERTY & CASUAL, SPECIALTY RETAIL, HOME IMPROVEMENT

Currently 5.00/5

Rating: 5.0/5 (1 vote)

Steven Romick Buys 2 New Stocks

April 10, 2013

Steven Romick, manager of the go-anywhere, value-based FPA Crescent Fund, said on CNBC as recently as March 20 that he has had difficulty finding companies with the kind of margin of safety and risk-reward ratio he demands. Consequently, Romick as of that time has 25% to 30% of his fund in cash, which he plans to deploy when volatility arrives again and presents opportunities. More...

Currently 3.00/5

Rating: 3.0/5 (2 votes)

Steven Romick's Letter to the Board of Occidental Petroleum Corp

April 9, 2013

April 4, 2013 More...

Currently 3.83/5

Rating: 3.8/5 (6 votes)

FPA's Steve Romick - There Is No Reason to Think the Fed Knows What It Is Doing

March 20, 2013

Steven Romick was on CNBC this morning and as per usual he was making a lot of sense. Here are some of his comments: More...

Currently 0.00/5

Rating: 0.0/5 (0 votes)

Steven Romick Comments on Orkla

January 31, 2013

Norway-based Orkla (PINK:ORKLY) has all the characteristics of a classic Contrarian special situation with a catalyst. At the time of our purchase, the company was viewed as an unwieldy conglomerate with activities in branded consumer goods (think a Scandinavia-focused Unilever), hydro power, aluminum industrial products (SAPA), specialty chemicals (Borregaard), solar (REC), and a significant minority interest in a privately-held paints and coatings business (Jotun). As if the aforementioned smorgasbord of activities was not sufficiently complex to discourage analysis, Orkla also had a portfolio of publicly traded securities and a collection of Scandinavian real estate investments. More...

Currently 0.00/5

Rating: 0.0/5 (0 votes)

Steven Romick Comments on Groupe Bruxelles Lambert

January 31, 2013

Groupe Bruxelles Lambert (GBL)(EBR:GBLB) is a Belgian holding company run by Albert Frere, a man widely referred to as the ‘Warren Buffett of Europe.’ The company owns significant stakes in a variety of established companies including Total (energy), Lafarge (cement), Pernod (alcoholic spirits), and GDF Suez (utility). Though the various underlying companies all have leverage of varying degrees, the holding company is essentially debt free, allowing for a simple sum of the parts evaluation. More...

Currently 0.00/5

Rating: 0.0/5 (0 votes)

Steve Romick Crescent Fund - Q4 2012 Shareholder Letter

January 31, 2013

Steve Romick - Crescent Fund Q4 2012 More...

Currently 4.20/5

Rating: 4.2/5 (5 votes)

The Top Companies Steven Romick Is Shorting

January 22, 2013

Steven Romick, who manages the FPA Crescent Fund at $20 billion First Pacific Advisors, is one of the few investors who discloses his short positions. As a value investor, Romick researches for stocks that are trading at discounts and usually in out-of-favor industries, with an eye to the macro environment. Romick just updated his fourth quarter portfolio. The biggest portfolio stocks he is expecting to move downward are: Express Scripts (ESRX), AvalonBay Communities (AVB) and Essex Property Trust (ESS). More...

Currently 4.00/5

Rating: 4.0/5 (2 votes)

Steven Romick’s Top Growth Predictable Stocks

January 22, 2013

As the co-managing partner of Los Angeles-based First Pacific Advisors LLC, Steven Romick heads the firm’s Crescent Fund, through a contrarian value strategy. Romick has helped deliver about 125 percent cumulative return over the last 10 years, beating the S&P 500 by a long shot. More...

Currently 4.60/5

Rating: 4.6/5 (5 votes)

Steven Romick Adds to Microsoft, AIG and Interpublic Group

January 21, 2013

Of the $20 billion FPA Capital has in assets under management, Steven Romick manages $9.9 billion in its Crescent Fund, none of which he saw fit to invest in new stocks for the second consecutive quarter. The contrarian value investor instead added the most to Interpublic Group (IPG), Microsoft Corp. (MSFT) and American International Group Inc. (AIG). More...

Currently 4.00/5

Rating: 4.0/5 (4 votes)

Currently 3.50/5

Rating: 3.5/5 (6 votes)

FPA Capital Fund Inc. Quarterly Commentary

October 30, 2012

After underperforming the first two quarters of the year, your portfolio outperformed its benchmarks in the third quarter of 2012. However, the performance still lags the benchmark on a year-to-date basis. The fund’s elevated cash level has contributed roughly 250 basis points of performance drag thus far in 2012, but our absolute value strategy necessitates that we hold cash when there is a dearth of value in the markets we follow. More...

Currently 2.75/5

Rating: 2.8/5 (8 votes)

Steve Romick Comments on Ensco

October 30, 2012

Ensco (ESV)10 Whereas Walmart is an example of a type of "compounder" we like to buy, Ensco is an example of a "3:1" - a purchase we make when we believe the potential upside is 3x larger than the potential downside. We haveowned Ensco for a number of years, and it has also been discussed in the past, along with our investments in other oil service companies. 11 Ensco is an average business with no long-term competitive advantages. It seems that to effectively compete, a rig company only requires capital and a contract with an Asian shipyard. Such ease of market entry convinces us that a company that builds a rig and then leases it should not expect to earn more than a 10% to 12% long-term return on capital. In a tight market, demand exceeds the number of rigs available, and return on capital rises above the long-term average. At such times, one generally expects to see new orders for rigs. As those rigs come to market a few years down the road, day rates, and thus returns on capital, decline. More...

Currently 3.70/5

Rating: 3.7/5 (10 votes)

Steve Romick Comments on Walmart

October 30, 2012

Walmart: Walmart's earnings met or exceeded expectations in the last year a nd concerns about its ability to grow dissipated, triggering renewed investor interest in the company. Not much changed in Walmart's fundamentals, but the stock price and P/E 2 moved higher. With our investment having exceeded our return expectations and greater downside risk accompanying the higher stock price, we scaled back our stake. We'll use Walmart to illustrate how an investment can come full circle – from buy to sell. Our original thesis, laidout in our 2010 Q4 commentary, is reprinted below. More...

Currently 4.14/5

Rating: 4.1/5 (7 votes)

Steven Romick Owns French Car Maker Renault, Shorts Nissan and Volvo

October 25, 2012

In an interview on WealthTrack with Consuelo Mack, FPA Capital’s Steven Romick put forth a complex play on the auto industry and European crisis: buying long Renault (RNO_FP) shares and shorting Volvo (PINK:VOLVY) and Nissan (NSANF). The positioning, he said, is resulting in him getting paid to own Renault. More...

Currently 3.21/5

Rating: 3.2/5 (14 votes)

Steven Romick on WealthTrack

October 20, 2012

Steven Romick on WealthTrack: On this week’s Consuelo Mack WealthTrack, a rare interview with Great Investor, Steven Romick of FPA Crescent Fund. Romick describes how he is keeping his five-star rated fund on top by balancing the forces of inflation and deflation and continuing his contrarian, value-oriented strategies. More...

Currently 2.83/5

Rating: 2.8/5 (6 votes)

Steven Romick Buys Analog Devices, Adds to IPG, AIG and ORCL in Third Quarter

October 16, 2012

Portfolio manager of the FPA Crescent Fund and Contrarian Value Strategy at First Pacific Advisors, Steven Romick, added one new domestic stock to his portfolio in the third quarter: Analog Devices Inc. (ADI). The largest additions to the 10 holdings he increased are: Interpublic Group of Companies Inc. (IPG), American International Group Inc. (AIG) and Oracle Corp. (ORCL). More...

Currently 3.17/5

Rating: 3.2/5 (6 votes)

Steven Romick’s Latest Sells as of 9/30/2012

October 15, 2012

As FPA Crescent Fund’s portfolio manager, investment Guru Steve Romick has made updates to his portfolio picks for the end of the third quarter. Below are the four companies of which he made stock reductions. More...