FPA Crescent Fund’s Steven Romick in the first quarter preferred to have cash ready to put to work in case volatility hit the markets, rather than buy new stocks. He believes a period of volatility – and the low-priced opportunities it would bring with it – could occur soon.
“But, we are confident that there will be more volatility in our future and with it, investment opportunity. The CBOE Volatility Index13 (VIX) reflects a market estimate of future volatility. When compared to the last 24 years, at 12.87, the index is just 14% above its low; 36% below its average; and 71% below its high.14 If I were a betting man – and I am not – I would wager the index won’t end the year where it started.”
Stocks’ continued growth in 2013 did not rely on firm factors, he believes, adding in his letter:
Roubaix Composite February 2021 Net Return +7.87%; YTD Net Return +11.34%
The February 2021 monthly tearsheet for the Roubaix Fund Composite, a fundamental long/short equity strategy focused on small and mid cap U.S. stocks. Q4 2020 hedge fund letters, conferences and more Roubaix Composite Performance Roubaix generated a net return of +7.87% in February relative to the long-only benchmark Russell 2000 Index total return of +6.23% Read More
“Valuation multiples trumping earnings growth cannot continue ad infinitum. In most markets, 2013, like 2012 before it, benefited from the willingness of investors to pay a higher price per dollar of earnings. Earnings growth eventually must carry the day.”
The investor did enlarge his positions in certain existing holding during the first quarter of 2014. His biggest increases were made to his holdings in Citigroup Inc (NYSE:C), Johnson & Johnson (NYSE:JNJ), TE Connectivity Ltd (NYSE:TEL), Genting Malaysia Bhd (KLSE:GENM) (OTCMKTS:GMALY) and CIT Group Inc. (NYSE:CIT).
Steven Romick’s equity portfolio is valued at $8.55 billion, and lists 52 positions, with 30.9% of assets weighted in the largest represented sector, Technology.
Steven Romick’s Largest Increases
Steven Romick added 523,700 shares to his Citigroup Inc (NYSE:C) stake, increasing it by 29.4% and giving it a 1.3% portfolio weight. Shares of the company averaged $50 each during the quarter.
Citigroup Inc. was incorporated in 1988 under the laws of the State of Delaware. Citigroup Inc. has a market cap of $145.42 billion; its shares were traded at around $47.89 with a P/E ratio of 11.0 and P/S ratio of 1.9. The dividend yield of Citigroup Inc. stocks is 0.10%.
Johnson & Johnson
Steven Romick bought 410,000 shares of Johnson & Johnson (NYSE:JNJ), increasing the stake by 28.77%, and making the holding worth 2.1% of the portfolio. The company’s share price averaged $93 during the quarter.
Johnson & Johnson (NYSE:JNJ) was incorporated in the State of New Jersey in 1887. Johnson & Johnson has a market cap of $279.38 billion; its shares were traded at around $98.76 with a P/E ratio of 20.6 and P/S ratio of 4.0. The dividend yield of Johnson & Johnson stocks is 2.7%. Johnson & Johnson had an annual average earnings growth of 3.50% over the past 10 years.
TE Connectivity Ltd. (TEL)
Steven Romick purchased 353,200 additional shares of TE Connectivity Ltd (NYSE:TEL), increasing the position by 26.76% and making it 1.2% of his portfolio. The company’s share price averaged $57 in the first quarter.
TE Connectivity Ltd (NYSE:TEL) is a company that designs and manufactures electronic products that connect and protect the flow of power and data. TE Connectivity Ltd. has a market cap of $24.84 billion; its shares were traded at around $60.54 with a P/E ratio of 19.0 and P/S ratio of 1.90. The dividend yield of Te Connectivity Ltd. stocks is 1.70%.
Genting Malaysia Bhd (XKLS:4715)
Steven Romick bought 11,190,500 shares of Genting Malaysia Bhd (KLSE:GENM) (OTCMKTS:GMALY), increasing the position by 21.02% and making it 0.97% of the portfolio. The company’s share price averaged RM4.27 in the first quarter.
Genting Malaysia Bhd (KLSE:GENM) (OTCMKTS:GMALY) is a leisure and hospitality company. Genting Malaysia Bhd has a market cap of $24.16 billion; its shares were traded at around RM4.20 with a P/E ratio of 64.20 and P/S ratio of 74.07. The dividend yield of Genting Malaysia Bhd stocks is 2.18%.
CIT Group Inc. (CIT)
Steven Romick purchased 361,500 additional shares of CIT Group Inc. (NYSE:CIT), increasing the holding by 16.86% and making it 1.4% of his portfolio. The share price of the company averaged $48.74 during the quarter.
CIT Group Inc. (NYSE:CIT) was founded in 1908. It is incorporated in the state of Delaware. CIT Group Inc. has a market cap of $9.09 billion; its shares were traded at around $46.53 with a P/E ratio of 13.80 and P/S ratio of 3.90. The dividend yield of CIT Group Inc. stocks is 0.40%.