, manager of the go-anywhere, value-based FPA Crescent Fund, said
on CNBC as recently as March 20 that he has had difficulty
finding companies with the kind of margin of safety and
risk-reward ratio he demands. Consequently, Romick as of that
time has 25% to 30% of his fund in cash, which he plans to deploy
when volatility arrives again and presents opportunities.
In total, Romick's FPA Crescent portfolio as of the end of the
fourth quarter contains 43 stocks, valued at $6.35 billion, and
had a quarter-over-quarter turnover of 2%.
In the fourth quarter bought just two stocks: high-tech
engineering and manufacturing company ITT Corp. (
) and British real estate agency and lettings group Countrywide
ITT Corp. (
Romick purchased 1,775,800 shares of ITT Corp. for an average
price of $26 per share in the fourth quarter. The holding takes a
0.83% portfolio weighting. In the past year the stock gained
almost 30% and is near its 10-year high of $29.14 per share on
With 8,000 employees and a $2.58 billion market cap, ITT has four
areas of focus: industrial process, motion technologies,
interconnect solutions and control technologies. It spun off its
defense businesses into ITT Exelis and its water technology
business into Xylem Inc. in 2011.
For 2012, ITT Corp. revenue increased 7% year over year to $2.2
billion and net income increased to $125 million, or $1.35 per
share, from a $130 million, or $1.40 per-share loss the previous
year. The company's free cash flow reached $160 million, from $74
million in 2011. ITT Corp. has $1.02 billion in cash on its
balance sheet at year-end, and $1.89 billion in liabilities, with
zero long-term debt.
The strong results enabled the company to increase its dividend
10% to $0.10 per share and its share repurchases by an additional
ITT Corp. trades with a P/E ratio of 20.7 and P/B ratio of 3.61,
near a 10-year high.
Countrywide PLC (
Romick purchased 3,171,611 shares of Countrywide PLC in the
fourth quarter for a 0.31% weighting in his portfolio. Shares of
the company have increased about 10% over the past year.
Countrywide is the largest local property services company in the
UK, with approximately 10,500 employees and arranged 1 out of
every 17 mortgages in the UK in 2011.
For the year ended Dec. 31, 2012, the company's revenue increased
6% from the previous year to �539.8 million. EBITDA
also increased 12% to �63 million, and it increased
its cash position to �47 million pounds on its balance
Countrywide has a market cap of $899.72 million; its shares were
traded on Wednesday around $4.23, with a P/S ratio of 1.6807
. Also check out the
, Top Growth Companies, and High Yield stocks of Steven Romick.
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