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James Li
James Li
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Steven Romick Discloses Univar Stake, Axes 3 Positions in 1st Quarter

FPA Crescent Fund manager releases portfolio

Steven Romick (Trades, Portfolio), manager of the FPA Crescent Fund, disclosed this week he gained a new holding in Univar Inc. (NYSE:UNVR) and closed three positions during the first quarter: WPP PLC (NYSE:WPP)(LSE:WPP), Expedia Group Inc. (NASDAQ:EXPE) and Oracle Corp. (NYSE:ORCL).

Managing a portfolio of 56 stocks, Romick seeks value in all parts of a company’s capital structure, including common stock, preferred stock, corporate and convertible bonds. The fund manager seeks investments that reflect low cyclically-adjusted price-earnings ratios and trade at discounts to private market value.


Romick said in his fund update the Crescent Fund returned 10.80% for the quarter, lagging the Standard & Poor’s 500 Index's return of 13.65% as utility stocks like PG&E Corp. (NYSE:PCG) detracted from performance.



Romick disclosed a 6,575,061-share stake in Univar, a manufacturer of specialty chemicals and chemical-based products. Shares averaged $21.51 during the quarter and occupy 1.49% of Romick’s equity portfolio.


Univar completed its acquisition of Nexeo Solutions on March 1, in which shareholders received 0.305 shares of Univar common stock and $3.02 in cash for each common share of Nexeo Solutions. GuruFocus ranks the Downers Grove, Illinois-based company’s financial strength and profitability 5 out of 10: Although the company’s operating margin is near a 10-year high of 5.01%, Univar’s profit margins are underperforming over 68% of global competitors.



Romick sold 14,231,167 shares of WPP PLC, trimming the equity portfolio 1.70%. Shares traded for an average price of 8.54 pounds ($11.13) during the quarter.


U.K.-based WPP engages in various advertising services, which include digital advertising, public relations and consulting. GuruFocus ranks the company’s profitability 8 out of 10: Even though its margins have contracted over the past five years, WPP’s operating margin is still outperforming over 80% of global competitors. Despite this, the company’s four-star business predictability is on watch: Revenues have declined over the past 12 months even though earnings growth has remained consistent over the past 10 years.



Romick sold 1,142,570 shares of Expedia, reducing the equity portfolio 1.41%. Shares traded for an average price of $121.31 during the quarter.0a617640-6155-11e9-8b83-637b51092956.png

The Bellevue, Washington-based company provides travel and lodging services across brands like Expedia.com, Hotels.com, Travelocity and Orbitz. GuruFocus ranks the company’s profitability 7 out of 10 primarily due to a Joel Greenblatt (Trades, Portfolio) return on capital and a three-year revenue growth rate that outperform 74% of global competitors. Despite this, Expedia’s operating margin has declined approximately 6.5% per year over the past five years and is underperforming approximately 60% of global leisure companies.



Romick sold 2,560,043 shares of Oracle, reducing the equity portfolio 1.26%. Shares traded for an average price of $50.84.


The Redwood City, California-based company offers a wide range of information technology solutions, including databases and middleware. GuruFocus ranks the Java parent’s profitability 7 out of 10: Oracle’s operating margins are still outperforming over 96% of global competitors despite contracting approximately 2.2% per year over the past five years. Despite this, Oracle’s three-year revenue growth rate of 1.40% underperforms 59% of global application software companies.


Disclosure: No positions.

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About the author:

James Li
I am an editorial assistant and researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

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