Steven Romick (Trades, Portfolio) disclosed his portfolio for the fourth quarter of 2022 earlier this month.
Part of Los Angeles-based investment firm First Pacific Advisors (Trades, Portfolio), the guru manages the FPA Crescent Fund along with Brian Selmo and Mark Landecker. Taking both long and short positions, the fund's objective is to generate returns with less risk than the market while avoiding permanent loss of capital. Its strategy combines deep research with a focus on strong fundamentals, attractive risk-reward and diversification across geographies, market caps, sectors and capital structure.
Romick entered nine new positions, sold out of 26 stocks and added to or trimmed a slew of other existing investments during the three months ended Dec. 31. Among his most notable trades listed in the 13F filing were a new holding in Naspers Ltd. (JES:NPN), reduced bets on Broadcom Inc. (AVGO, Financial) and Glencore PLC (LSE:GLEN, Financial) and the divestment of Prosus NV (XAMS:PRX, Financial) and Flutter Entertainment Inc. (LSE:FLTR, Financial).
Investors should be aware that 13F filings do not give a complete picture of a firm’s holdings as they only include its positions in U.S. stocks and American depository receipts, but the reports can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Naspers
The guru invested in 567,954 shares of Naspers (JSE:NPN, Financial), allocating 1.63% of the equity portfolio to the holding. The stock traded for an average price of 2,404.84 South African rand ($141.73) per share during the quarter.
Romick previously sold out of the stock in the second quarter of 2022.
The South African communication services company, which operates and invests in internet, technology and multimedia assets around the world, has a market cap of 704.48 billion rand; its shares closed at 3,355 rand on Tuesday with a price-earnings ratio of 13.22, a price-book ratio of 2.36 and a price-sales ratio of 5.30.
The GF Value Line suggests the stock, while undervalued, is a possible value trap currently based on its historical ratios, past financial performance and analysts’ future earnings projections. As such, potential investors should do thorough research before making a decision.
Further, the GF Score of 78 out of 100 indicates the company is likely to have average performance going forward. While it received a high growth rank, its profitability, financial strength and momentum ratings were more moderate and its GF Value was low.
Of the gurus invested in Naspers, Romick has the largest holding with 0.27% of its outstanding shares. The iShares MSCI ACWI ex. U.S. ETF also owns the stock.
Broadcom
Impacting the equity portfolio by -1.11%, the investor curbed his Broadcom (AVGO, Financial) position by 33.56%, selling 137,354 shares. During the quarter, shares traded for an average price of $501.40 each.
He now holds 271,961 shares total, representing 2.63% of the equity portfolio. GuruFocus data shows Romick has gained 67.75% on the investment so far.
The manufacturer of semiconductor and infrastructure software products, which is headquartered in San Jose, California has a $242.41 billion market cap; its shares were trading around $580.08 on Tuesday with a price-earnings ratio of 21.95, a price-book ratio of 10.68 and a price-sales ratio of 7.43.
According to the GF Value Line, the stock is fairly valued currently.
The GF Score of 92 means the company has high outperformance potential, driven by strong ratings for profitability, growth and momentum and middling financial strength and GF Value ranks.
With a 0.37% stake, Ken Fisher (Trades, Portfolio) is Broadcom’s largest guru shareholder. Other top guru investors include the late Spiros Segalas (Trades, Portfolio)’ fund, Barrow, Hanley, Mewhinney & Strauss, First Pacific Advisors (Trades, Portfolio), Jim Simons (Trades, Portfolio)’ Renaissance Technologies, Philippe Laffont (Trades, Portfolio) and Steven Cohen (Trades, Portfolio).
Glencore
Romick pared back his Glencore (LSE:GLEN, Financial) stake by 19.38%, selling 6.01 million shares. The transaction had an impact of -0.58% on the equity portfolio. The sock traded for an average per-share price of 5.22 British pounds ($6.45) during the quarter.
He now holds 25.01 million shares in total, which occupy 2.89% of the equity portfolio and is his ninth-largest holding. To date, he has gained an estimated 62.35% on the investment according to GuruFocus.
The Swiss mining company has a market cap of 70.57 billion pounds; its U.K.-listed shares closed at 5.53 pounds on Tuesday with a price-earnings ratio of 5.82, a price-book ratio of 1.87 and a price-sales ratio of 0.38.
Based on the GF Value Line, the stock appears to be significantly overvalued currently.
With a GF Score of 65, the company has poor performance potential on the back of middling marks for four of the criteria and a low GF Value rank.
David Herro (Trades, Portfolio) is Glencore’s largest guru shareholder with a 0.50% stake. Azvalor Internacional FI (Trades, Portfolio), the iShares MSCI ACWI ex. U.S. ETF and Azvalor Blue Chips FI (Trades, Portfolio) also own the stock.
Prosus
With an impact of -2.15% on the equity portfolio, the guru sold all 2.25 million shares of Prosus (XAMS:PRX, Financial). The stock traded for an average price of 56.43 euros ($60.92) per share during the quarter.
GuruFocus found Romick lost an estimated 16.74% on the investment over its lifetime.
Spun off from Naspers in September 2019, the Netherlands-based communication services company, which invests in internet, digital media, e-commerce retailing and technology, has a market cap of 230.38 billion euros; its shares closed at 75.55 euros on Tuesday with a price-earnings ratio of 19.40, a price-book ratio of 5.63 and a price-sales ratio of 15.32.
The GF Value Line suggests the stock, while undervalued, is a possible value trap currently. As such, potential investors should conduct thorough research before making a decision.
The GF Score of 79 means the company is likely to have average performance in the future. While it raked in moderate ratings for three of the criteria, the growth and financial strength ranks were high.
Of the gurus invested in Prosus, Herro has the largest stake with 0.27% of its outstanding shares. The stock is also being held by Bestinfond (Trades, Portfolio), the Invesco EQV European Equity Fund (Trades, Portfolio) and the iShares MSCI ACWI ex. U.S. ETF.
Flutter Entertainment
The investor dumped his 369,859 remaining shares of Flutter Entertainment (LSE:FLTR, Financial), which impacted the equity portfolio by -0.74%. Shares traded for an average price of 113.26 pounds each during the quarter.
GuruFocus data shows Romick lost an estimated 15.58% on the investment, which was established in the second quarter of 2021.
The Irish company, which provides global sports betting, gaming and entertainment services, has a market cap of 21.86 billion pounds; its shares closed at 122.40 pounds on Tuesday with a price-book ratio of 2.06 and a price-sales ratio of 3.30.
According to the GF Value Line, the stock is modestly undervalued currently.
The company also has good outperformance potential based on its GF Score of 86. Although it got high marks for growth, profitability and GF Value, the financial strength rank was more moderate and momentum was low.
With 0.04% of its outstanding shares, the Invesco EQV European Equity Fund (Trades, Portfolio) is the only guru currently invested in Flutter Entertainment.
Additional trades and portfolio performance
During the quarter, Romick also boosted his positions in International Flavors & Fragrances Inc. (IFF, Financial), Icon PLC (ICLR, Financial) and CarMax Inc. (KMX, Financial) and reduced his Entain PLC (LSE:ENT, Financial) and Swire Pacific Ltd. (HKSE:00019, Financial) holdings.
The guru’s $5.79 billion equity portfolio, which is composed of 123 stocks, is largely invested in the financial services and communication services sectors, followed by the technology space.
The FPA Crescent Fund posted a return of -9.20% for 2022, outperforming the S&P 500’s -19.44% return.
