Steven Romick (Trades, Portfolio) disclosed his portfolio for the second quarter last week.
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 did not enter any new positions, but sold out of eight stocks and added to or trimmed a slew of other existing investments during the three months ended June 30. Among his most notable trades listed in the NPORT-P filing were increased holdings of Heineken Holding NV (XMAS:HEIO), Douglas Emmett Inc. (DEI, Financial) and International Flavors & Fragrances Inc. (IFF, Financial) as well as reduced bets on Broadcom Inc. (AVGO, Financial) and Alphabet Inc. (GOOG, Financial)(GOOGL, Financial).
Investors should be aware that, just like 13F reports, NPORT-P reports do not provide a complete picture of a guru’s holdings to the public. Filed by certain mutual funds after each quarter’s end, they collect a wide variety of information on the fund for the SEC’s reference, but in general, the only information made public is in regard to long equity positions. Unlike 13Fs, they do require some disclosure for long equity positions in foreign stocks. Despite their limitations, even these limited filings can provide valuable information. You can read more about form NPORT-P at the SEC website here.
Heineken Holding
The guru boosted the Heineken (XAMS:HEIO, Financial) stake by 91.87%, investing in 701,344 shares. The transaction had an impact of 1% on the equity portfolio. The stock traded for an average price of 83.48 euros ($93.72) per share during the quarter.
Romick now holds 1.46 million shares in total, which represent 2.08% of the equity portfolio. GuruFocus estimates he has lost 0.01% on the investment so far.
The Netherlands-based holding company for brewer Heineken NV has a market cap of 23.22 billion euros; its shares closed at 80.80 euros on Friday with a price-earnings ratio of 17.34, a price-book ratio of 2.40 and a price-sales ratio of 0.81.
The GF Value Line suggests the stock is modestly undervalued currently based on its historical ratios, past financial performance and analysts’ future earnings estimates.
At 78 out of 100, the GF Score indicates the company is likely to have average performance going forward. While it received high ratings for profitability, value and momentum, the growth rank is more moderate and the financial strength is low.
Of the gurus invested in Heineken Holding, the Tweedy Browne (Trades, Portfolio) International Value Fund has the largest stake with 0.75% of its outstanding shares. The Invesco EQV European Equity Fund (Trades, Portfolio) and the iShares MSCI ACWI ex. U.S. ETF also have positions in the stock.
Douglas Emmett
Romick increased the investment in Douglas Emmett (DEI, Financial) by 1,797.75%, picking up 3.55 million shares. The transaction impacted the equity portfolio by 0.73%. Shares traded for an average price of $12.09 each during the quarter.
He now holds 3.75 million shares total, accounting for 0.77% of the equity portfolio. GuruFocus found Romick has lost an estimated 0.95% on the investment to date.
The real estate investment trust headquartered in Santa Monica, California, which owns and operates office buildings and apartment complexes, has a $2.28 billion market cap; its shares were trading around $13.45 on Monday with a price-earnings ratio of 26.37, a price-book ratio of 0.95 and a price-sales ratio of 2.37.
According to the GF Value Line, the stock is a possible value trap currently. As such, potential investors should do thorough research before making a decision.
The GF Score of 68 implies the company has poor performance potential on the back of a high profitability rank, middling marks for growth, value and momentum and a low financial strength rating.
With an 8.17% stake, First Eagle Investment (Trades, Portfolio) is Douglass Emmett’s largest guru shareholder. Other top guru investors include Ron Baron (Trades, Portfolio) and Diamond Hill Capital (Trades, Portfolio).
International Flavors & Fragrances
The investor bolstered the stake in International Flavors & Fragrances (IFF, Financial) by 11.32%, buying 222,952 shares. The transaction impacted the equity portfolio by 0.29%. During the quarter, the stock traded for an average per-share price of $86.14.
Romick now holds 2.19 million shares in total, occupying 2.84% of the equity portfolio as his 10th-largest holding. According to GuruFocus, he has lost around 27.08% on the investment.
The New York-based company, which produces flavors, fragrances and cosmetic actives for a number of end markets, has a market cap of $20.32 billion; its shares were trading around $79.67 on Monday with a price-book ratio of 1.14 and a price-sales ratio of 1.66.
Based on the GF Value Line, the stock appears to be a possible value trap currently. Therefore, potential investors should do thorough research before making a decision.
The GF Score of 70 means the company has poor performance potential. Although International Flavors & Fragrances raked in high profitability and value ratings, the financial strength and momentum ranks are more moderate and growth is low.
First Pacific Advisors (Trades, Portfolio) is the company’s largest guru shareholder with a 1.21% stake. International Flavors & Fragrances is also being held by Daniel Loeb (Trades, Portfolio), the T Rowe Price Equity Income Fund (Trades, Portfolio), Andreas Halvorsen (Trades, Portfolio) and the Parnassus Value Equity Fund (Trades, Portfolio), among others.
Broadcom
The Broadcom (AVGO, Financial) holding was curbed by 25.07%, or 56,698 shares. The transaction had an impact on the equity portfolio of -0.63%. The stock traded for an average price of $712.03 per share during the quarter.
The guru now holds 169,418 shares total, giving it 2.39% space in the equity portfolio. GuruFocus says Romick has gained around 82.67% on the investment over its lifetime.
The manufacturer of semiconductor and infrastructure software products, which is headquartered in San Jose, California has a $375.69 billion market cap; its shares were trading around $910.35 on Monday with a price-earnings ratio of 28.54, a price-book ratio of 17.25 and a price-sales ratio of 11.05.
The GF Value Line suggests the stock is significantly overvalued currently.
The GF Score of 83 means the company has good outperformance potential, driven by strong ratings for profitability and growth, middling financial strength and momentum ranks and a low value grade.
Holding a 0.29% stake, Ken Fisher (Trades, Portfolio) is Broadcom’s largest guru shareholder. Other top guru investors include the Harbor Capital Appreciation Fund (Trades, Portfolio), Barrow, Hanley, Mewhinney & Strauss, Steven Cohen (Trades, Portfolio) and First Pacific Advisors (Trades, Portfolio).
Alphabet
Romick trimmed his positions in Alphabet’s Class A (GOOGL, Financial) and Class C (GOOG, Financial) stock, shedding around 200,000 shares for each. The transactions had impacts of -0.37 and -0.36%. During the quarter, shares traded for an average price of $114.92 and $115.57 respectively.
The investor now holds 2.21 million Class A shares and 1.62 million Class C shares. The Class A shares make up the fourth-largest holding at 4.30% and the Class C shares were given 3.19% space as the eighth-largest position. GuruFocus estimates he has gained around 357.67% on the long-held investments.
The Mountain View, California-based communications services company, which owns the Google search engine, YouTube and a number of other businesses, has a market cap of $1.58 trillion; its Class A shares were trading around $124.65 on Monday with a price-earnings ratio of 27.76, a price-book ratio of 6.08 and a price-sales ratio of 5.75.
According to the GF Value Line, the stock is modestly undervalued currently.
Supported by high ratings for all five criteria, the GF Score of 99 indicates the company has high outperformance potential.
Fisher is Alphabet’s largest guru shareholder with 0.33% of its outstanding Class A shares. The stock is also being held by PRIMECAP Management (Trades, Portfolio), Dodge & Cox, the Harbor Capital Appreciation Fund (Trades, Portfolio), Bill Nygren (Trades, Portfolio), Philippe Laffont (Trades, Portfolio), Hotchkis & Wiley and Daniel Loeb (Trades, Portfolio), among many others.
Additional trades and performance
During the quarter, Romick also sold out of several stocks, including Churchill Capital Corp VII (CVII.U, Financial) and Metals Acquisition Ltd. (MTAL, Financial), and cut back his investments in Heidelberg Materials AG (XTER:HEI, Financial), Netflix Inc. (NFLX, Financial) and Holcim Ltd. (XSWX:HOLN, Financial).
The guru’s $6.14 billion equity portfolio, which is composed of 96 stocks, is largely invested in the communication services, financial services and technology sectors, followed by the basic materials space.
The FPA Crescent Fund posted a return of -9.20% for 2022, outperforming the S&P 500’s -18.11% return.
