FPA Capital Fund

Last Update: 07-07-2017
Related: First Pacific Advisors
Steven Romick

Number of Stocks: 22
Number of New Stocks: 1

Total Value: $360 Mil
Q/Q Turnover: 7%

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

FPA Capital Fund' s Profile & Performance

Profile

FPA Capital Fund, Inc. (FPPTX) seeks long-term growth through investing primarily in carefully selected common stocks and select fixed income securities.

-Fundamental bottom-up, deep value stock picking with economic and industry point of view
-Capitalize on best ideas with concentrated portfolios
-Focus on long term, turnover averaging less than 20% over 20 years

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

Investing Philosophy

FPA Capital Fund primarily invests in the stocks of smaller companies. It 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. The fund's 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. The fund looks for companies with a track record of high returns on equity, and a long history. It 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. The fund's portfolio generally holds 25-45 equities and its investment outlook is typically 3-5 years.

Historical Allocation of Stock, Bonds, Cash

Total Holding History

Performance of FPA Capital Fund

YearReturn (%)S&P500 (%)Excess Gain (%)
201622.8611.9610.9
2015-17.161.38-18.5
2014-1.3113.69-15.0
3-Year Cumulative0.4 (0.1%/year)29 (8.9%/year)-28.6 (-8.8%/year)
201322.8532.39-9.5
20129.6916-6.3
5-Year Cumulative35.4 (6.2%/year)98.2 (14.7%/year)-62.8 (-8.5%/year)
20110.92.11-1.2
201024.2515.069.2
200953.7826.4627.3
2008-34.79-372.2
2007-0.395.49-5.9
10-Year Cumulative69.5 (5.4%/year)95.7 (6.9%/year)-26.2 (-1.5%/year)
20065.4215.79-10.4
200516.534.9111.6
200412.6210.881.7
200338.5428.689.9
2002-3.86-22.118.2
15-Year Cumulative212.3 (7.9%/year)164.2 (6.7%/year)48.1 (1.2%/year)
200138.13-11.8950.0
2000-3.08-9.16.0
199914.2421.04-6.8
1998-0.4228.58-29.0
199717.733.36-15.7
20-Year Cumulative459.9 (9%/year)339.2 (7.7%/year)120.7 (1.3%/year)
199637.7622.9614.8
199538.3937.580.8
199410.371.329.0
199316.7410.086.7
199221.577.6213.9
25-Year Cumulative1571.9 (11.9%/year)791.8 (9.1%/year)780.1 (2.8%/year)
199164.5130.4734.0
1990-13.8-3.1-10.7
198924.331.69-7.4
198818.1116.611.5
198710.755.15.7
30-Year Cumulative3755 (12.9%/year)1719.7 (10.2%/year)2035.3 (2.7%/year)
198612.5718.6-6.0
198528.9531.6-2.6
198476.10.9

Top Ranked Articles

FPA Capital Reduces InterDigital Stake as Company's Market Price Blossoms InterDigital reached its 10-year high in price during the 3rd quarter
FPA Capital Fund (Trades, Portfolio), an investment firm that seeks long-term growth through the careful selection of common stocks and select fixed income securities, slashed its stake in InterDigital Inc. (NASDAQ:IDCC) during the third quarter, removing 359,582 shares of the company from its portfolio. The trade had a -3.79% impact on FPA Capital Fund (Trades, Portfolio)’s portfolio. The fund now owns 353,448 shares of InterDigital. Read more...
FPA Capital Sells Western Digital, Buys Allegiant The company's largest 2nd-quarter trades
FPA Capital Fund is a Los Angeles-based institutional money management firm, employing a disciplined approach to value investing, prudently seeking superior long-term returns while maintaining a focus on capital preservation. During the second quarter the guru traded shares in the following stocks: Read more...
FPA Capital Comments on Houghton Mifflin Guru stock highlight
The biggest negative contributor for the Fund was Houghton Mifflin (NASDAQ:HMHC), which detracted 47 basis points from the Fund’s performance in the quarter. HMHC has not performed well for the Fund since we first purchased its shares. The company has missed quarterly earnings expectations, and the Board of Directors recently chose to terminate the CEO. Read more...
FPA Capital Comments on Allegiant Travel Guru stock highlight
The one new stock that has not been in the portfolio in the past is Allegiant Travel (NASDAQ:ALGT). ALGT is a no-frills, discount airline operator that caters to the budget-minded leisure customer. One way ALGT saves money for its passengers is by flying into and out of smaller regional airports. For example, instead of flying into Orlando International Airport in Florida, ALGT operates out of the Orlando Sanford International Airport, which is roughly 25 miles north of the bigger international airport. Further, because of its unique focus on smaller airports and cheaper, used aircraft, 81% of ALGT’s scheduled routes have no competition. ALGT also is transitioning its fleet to Airbus A319 and A320 planes. Those planes are fuel efficient, and they use the similar engines and parts, which allows for much lower maintenance costs.

ALGT has declined roughly 30% from its peak a couple of years ago, partly due to flight operation issues with its older MD-80 planes, and partly because of lower operating profits tied Read more...
FPA Capital Fund Adds to Houghton Mifflin Harcourt Fund increases position in educational materials supplier
FPA Capital Fund (TradesPortfolio) increased its holding of Houghton Mifflin Harcourt Co. (NASDAQ:HMHC) during the first quarter, buying 733,470 shares for an aveage price of $10.46 per share. The trade expanded the portfilio position by 1.5%. Read more...
» More FPA Capital Fund Articles

Commentaries and Stories

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FPA Capital Comments on Amazon Guru stock highlight
For the second quarter, as mentioned earlier, large-capitalized stocks performed better than small-cap stocks. The NASDAQ was the best performer, helped by the gain achieved by the omnipresent Amazon (NASDAQ:AMZN) and other mega-cap technology stocks. While different styles generally have some dispersion in returns from quarter to quarter, this past period was very dramatic. We expect this wide dispersion in returns to narrow in the future.In last quarter’s letter, we discussed the trend of investors allocating more of their capital to passive strategies like index funds and exchange-traded funds (ETFs) and away from active managers. AMZN and other stocks in the S&P 500 are where the large flows of capital have headed. It is worth noting that the 2017 ETF inflows, depicted below, are through the middle of June, so we are on pace to double the record inflows experienced last year. Currently, passive investors own roughly 15% of AMZN’s equity through index More...

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FPA Capital Comments on Allegiant Travel Guru stock highlight
The one new stock that has not been in the portfolio in the past is Allegiant Travel (NASDAQ:ALGT). ALGT is a no-frills, discount airline operator that caters to the budget-minded leisure customer. One way ALGT saves money for its passengers is by flying into and out of smaller regional airports. For example, instead of flying into Orlando International Airport in Florida, ALGT operates out of the Orlando Sanford International Airport, which is roughly 25 miles north of the bigger international airport. Further, because of its unique focus on smaller airports and cheaper, used aircraft, 81% of ALGT’s scheduled routes have no competition. ALGT also is transitioning its fleet to Airbus A319 and A320 planes. Those planes are fuel efficient, and they use the similar engines and parts, which allows for much lower maintenance costs.ALGT has declined roughly 30% from its peak a couple of years ago, partly due to flight operation issues with its older MD-80 planes, and partly because of lower operating profits tied More...

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FPA Capital Comments on Babcock & Wilcox Enterprises Guru stock highlight
Babcock & Wilcox Enterprises (NYSE:BW) also performed well in the quarter. We discussed BW in our first quarter letter and pointed out that management made a poor strategic decision in its fast-growing renewables business, and that the stock was hit hard during that quarter for that mistake. Subsequent to publishing our first-quarter letter, BW hosted a quarterly earnings conference call and provided positive news on the company’s progress in fixing its problems. The near-term stock price performance now largely rests on the company’s ability to continue fixing the renewables problems and preventing further cost overruns in that division.During the second quarter, we added three new stocks to the portfolio and eliminated three other companies. The three new stocks are in three different industries: one is an airline, another is a financial services company, and the other is a retailer. Two of the new stocks are what we refer to as ‘old friends’ because the Fund has invested in the companies before. More...

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FPA Capital Comments on Aaron’s Inc Guru stock highlight
Let’s now review a couple of stocks that performed well in the quarter. The top positive contributor this quarter was Aaron’s Inc. (NYSE:AAN). Aaron’s has been in the portfolio for several years, and it’s a holding we have described in the past. In short, Aaron’s is categorized as a “Rent-to-Own” (RTO) business. There are two somewhat related divisions owned by AAN. The first division includes AAN’s physical stores, which offer consumer electronic products, furniture, appliances, and other household products to individuals on lease terms with the option to buy the product through over 1,800 company-operated and franchise brick & mortar retail locations.The second business, Progressive Finance Holdings, is a virtual RTO operation. Progressive is a virtual operation because all of its business is handled through third-party retailer relationships. Essentially, Progressive buys the product from the retailer and immediately leases it to a customer after Progressive has approved the customer’s More...

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FPA Capital Comments on Cimarex Guru stock highlight
We understand the market’s bearishness on RDC since the offshore drilling market’s recovery has lagged the U.S. shale oil recovery, but Cimarex’s second quarter stock performance strikes us as an over-reaction to oil’s roughly 10% price decline. As we noted above, XEC can produce excellent profits when oil is around $50 a barrel. The reason is that its oil reserves are among the lowest cost and highest productivity of all U.S. oil shale companies. Let’s look at the numbers. In the first quarter of this year, XEC generated a remarkable 50% adjusted operating profit margin, compared to 9.5% for ExxonMobil and 11.5% for EOG, the self-proclaimed low-cost producer. While most E&P oil companies struggled to make little or no money in the first quarter, XEC crushed the ball out of the stadium.Moreover, we estimate that XEC’s net asset value (NAV) is over $207 per share using $70 as the price of oil. However, at $60 oil, XEC’s NAV is roughly $162 per share. Thus, at the above range for oil prices, XEC is trading at nearly a 40% to 55% discount to our estimate of its NAV, and that assumes More...

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FPA Capital Fund 2nd Quarter 2017 Commentary Overview of markets and holdings FPA Capital Fund - FPA Capital Fund 2nd Quarter 2017 Commentary
Introduction More...

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Bargain Stocks: Allegiant Travel, Credit Acceptance Growing EPS and margins of safety Jim Simons,FPA Capital Fund,PRIMECAP Management,Ro - Bargain Stocks: Allegiant Travel, Credit Acceptance
Companies with growing earnings per share (EPS) are often good investments as they can return a solid profit to investors. According to the discount cash flow (DCF) calculator, the following are undervalued companies that have grown EPS over a five-year period. More...

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FPA Capital Gets Allegiant in 2nd Quarter Most of the fund’s transactions are sells FPA Capital Fund - FPA Capital Gets Allegiant In 2nd Quarter
Arik Ahitov and Dennis Bryan of FPA Capital Fund (Trades, Portfolio) seek long-term capital appreciation through investing in companies using a fundamental, bottom-up, deep value approach. During the second quarter, the fund managers invested in Allegiant Travel Co. (NASDAQ:ALGT) and trimmed their stakes in several positions, including Western Digital Corp. (NASDAQ:WDC), Aaron’s Inc. (NYSE:AAN) and Dana Inc. (NYSE:DAN). More...

FPA CAPITAL


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FPA Capital Sells Western Digital, Buys Allegiant The company's largest 2nd-quarter trades FPA Capital Fund,Andreas Halvorsen,T Rowe Price Eq - FPA Capital Sells Western Digital, Buys Allegiant
FPA Capital Fund is a Los Angeles-based institutional money management firm, employing a disciplined approach to value investing, prudently seeking superior long-term returns while maintaining a focus on capital preservation. During the second quarter the guru traded shares in the following stocks: More...

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FPA Capital Sells DeVry, Western Digital, Helmerich & Payne Largest 1st quarter sales by the firm FPA Capital Fund,Charles de Vaulx,John Rogers,Firs - FPA Capital Sells DeVry, Western Digital, Helmerich & Payne
FPA Capital Fund (Trades, Portfolio) manages a portfolio composed of 23 stocks with a total value of $500 million. The company seeks long-term growth through investing primarily in carefully selected common stocks and select fixed income securities. During the first quarter it sold shares in the following stocks: More...

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FPA Capital Fund First Quarter Commentary Overview of holdings and outlook FPA Capital Fund - FPA Capital Fund First Quarter Commentary
Déjà vu More...

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FPA Capital Buys Vista Outdoor, Akorn The fund's largest 1st-quarter buys FPA Capital Fund - FPA Capital Buys Vista Outdoor, Akorn
The FPA Capital Fund (Trades, Portfolio), a Los Angeles-based institutional money management fund, employs a disciplined approach to value investing that seeks superior long-term returns while maintaining a focus on capital preservation. During the first quarter, the fund bought shares of the following stocks: More...

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FPA Capital Fund Adds to Houghton Mifflin Harcourt Fund increases position in educational materials supplier FPA Capital Fund - FPA Capital Fund Adds To Houghton Mifflin Harcourt
FPA Capital Fund (TradesPortfolio) increased its holding of Houghton Mifflin Harcourt Co. (NASDAQ:HMHC) during the first quarter, buying 733,470 shares for an aveage price of $10.46 per share. The trade expanded the portfilio position by 1.5%. More...

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British Pepsi Distributor up Since December Britvic stock has increased and is still a good value FPA Capital Fund - British Pepsi Distributor Up Since December
Since we first wrote about Britvic PLC (LSE:BVIC) (BTVCY) (BTVCF) in December of last year, the stock is up 22% and still reasonably priced. Britvic is the British Pepsi distributor. The stock sold off in part because of Brexit concerns. More...

PEPSI, UK


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FPA Capital Invests in Akorn Company is expanding its operations FPA Capital Fund - FPA Capital Invests In Akorn
FPA Capital Fund (Trades, Portfolio) seeks long-term growth through the careful selection of common stocks and select fixed-income securities. During the first quarter it purchased 380,120 shares in Akorn Inc. (NASDAQ:AKRX) More...

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FPA Capital Comments on Babcock & Wilcox Guru stock highlight
We added a new healthcare name to the portfolio in the quarter, but it is too small of a weighting to discuss at this time. We slightly increased the Fund’s Babcock & Wilcox (NYSE:BW) holding as the stock declined a bit more than 6% in the quarter. Thus, we continue to actively manage the Fund by trimming stocks that rise toward their intrinsic value and adding to positions when stock values provide a nice margin of safety and trade at a discount to their fair value. More...

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FPA Capital Comments on Apollo Education Guru stock highlight
The largest stock reduction in terms of weighting percentage was Apollo Education (NASDAQ:APOL), which we reduced by over 80%. The reason is that APOL appreciated nearly 25% and approached the buyout price the board and shareholders agreed to earlier in the year. The Department of Education finally approved the acquisition of APOL by a private equity group with just a couple of conditions. More...

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FPA Capital Comments on SM Energy Guru stock highlight
SM Energy (NYSE:SM) also detracted from the Fund’s performance in the quarter by 14 basis points. SM declined in the quarter because the company issued a large secondary offering of stock to help pay for a couple of large properties it acquired in the Permian Basin. We agree with management that the Permian Basin offers very attractive oil and gas properties, but these properties will take a couple of years to develop and start producing cash flow for shareholders. In anticipation of a large equity offering, and after benefitting from the stock’s substantial appreciation during 2016, we had already reduced the Fund’s position in the stock by over 60% before the quarter commenced. Notably, SM was up 75% for the year, even after an approximately 11% decline in the fourth quarter. More...

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FPA Capital Comments on Houghton Mifflin Guru stock highlight
The biggest negative contributor for the Fund was Houghton Mifflin (NASDAQ:HMHC), which detracted 47 basis points from the Fund’s performance in the quarter. HMHC has not performed well for the Fund since we first purchased its shares. The company has missed quarterly earnings expectations, and the Board of Directors recently chose to terminate the CEO. More...

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