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James Li
James Li
Articles (775)  | Author's Website |

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.

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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.

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Univar

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.

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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.

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WPP PLC

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.

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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.

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Expedia

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.

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Oracle

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

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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.

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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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