Steven Romick

Steven Romick

FPA Crescent Fund
Last update 2020-01-15 57 Stocks (1 new)
Value $7.94 Bil Turnover 1 %
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Steven Romick 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

Steven Romick 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.
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Performance of FPA Crescent Fund

Year Return % S&P500 % Excess Gain %
2019 20.02 30.58 -10.6
2018 -7.43 -4.57 -2.9
2017 10.39 21.7 -11.3
3-Year Cumulative (2017-2019) 22.65 (7.04/Year) 51.65 (14.89/Year) -29.00 (-7.85/Year)
2016 10.25 12 -1.8
2015 -2.06 1.24 -3.3
5-Year Cumulative (2015-2019) 32.43 (5.78/Year) 71.96 (11.45/Year) -39.51 (-5.65/Year)
2014 6.64 13.46 -6.8
2013 21.95 32.31 -10.4
2012 10.33 15.99 -5.7
2011 3.02 1.9 1.1
2010 12.04 15.05 -3
10-Year Cumulative (2010-2019) 119.32 (8.17/Year) 251.03 (13.38/Year) -131.71 (-5.21/Year)
2009 28.37 26.35 2
2008 -20.55 -36.79 16.2
2007 6.84 5.15 1.7
2006 12.43 15.84 -3.4
2005 10.83 4.83 6
15-Year Cumulative (2005-2019) 197.79 (7.55/Year) 257.98 (8.87/Year) -60.19 (-1.30/Year)
2004 10.21 10.7 -0.5
2003 26.15 28.18 -2
2002 3.71 -21.58 25.3
2001 36.14 -11.76 47.9
2000 3.59 -9.75 13.3
20-Year Cumulative (2000-2019) 505.54 (9.42/Year) 217.22 (5.94/Year) 288.32 (3.48/Year)
1999 -6.28 20.38 -26.7
1998 2.79 28.69 -25.9
1997 21.95 33.49 -11.5
1996 22.88 22.5 0.4
1995 26.04 38.06 -12
25-Year Cumulative (1995-2019) 1001.79 (10.07/Year) 1009.46 (10.10/Year) -7.67 (-0.01/Year)
1994 4.22 0.38 3.8

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