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Steven Romick Buys 3 Stocks in 3rd Quarter

Steven Romick (Trades, Portfolio), manager of the FPA Crescent Fund, disclosed this week his three new positions for the third quarter were in Dell Technologies Inc. (NYSE:DELL), Prosus NV (XAMS:PRX) and Spectrum Brands Holdings Inc. (NYSE:SPB).

Managing a portfolio of 52 stocks, Romick seeks value in all parts of a company's capital structure, which include common stocks, preferred stocks, corporate bonds and convertible bonds. Romick mentioned in his second-quarter shareholder letter that regardless of the market trends, the FPA Crescent Fund will "continue to adhere to its long-term mandate and manage prudently." While the fund might miss gains if the markets continue spinning higher, the fund is also positioned to "do reasonably well" when the markets turn south.


As of quarter-end, FPA Crescent's $8.71 billion equity portfolio's top-three sectors in terms of weight are financial services, technology and industrials. Financial services companies occupy 36.21% of the portfolio while technology stocks represent 32.78% of the portfolio.

Dell Technologies

Romick purchased 2.722 million shares of Dell Technologies, giving the position 1.61% weight in the equity portfolio. Shares averaged $52.28 during the quarter.


Dell Inc. and EMC Corp. merged in September 2016 to form Dell Technologies, a Round Rock, Texas-based company that produces well-known products like the Dell personal computer and laptop. The company operates three business segments: Client Services Group, Infrastructure Services Group and VMWare.

Dell Technologies said in its Sept. 23 quarterly report that net revenues for the three months ending Aug. 2 were $23.37 billion, up 2% from the prior-year quarter net revenues of $22.94 billion. Strong growth in Dell's Client Services Group and VMWare business segments contributed to the increase in revenues. According to GuruFocus, Dell's three-year revenue growth rate of 30% is near a 10-year high and outperforms 92.54% of global competitors.


Gurus with large holdings in Dell Technologies include Dodge & Cox and Paul Singer (Trades, Portfolio)'s Elliott Management. Dell founder Michael Dell (Trades, Portfolio) also has a position.



Romick gained 1,424,355 shares of Prosus, giving the position 1.20% equity portfolio weight. Shares averaged 69.72 euros ($76.84) during the period from its initial public offering date of Sept. 11 to Sept. 30.

The Naspers Ltd. (JSE:NPN) spinoff comprises of the parent's international internet assets, with investments in major online platforms including WeChat parent Tencent Holdings Ltd. (TCEHY)(HKSE:00700). According to GuruFocus, Prosus' equity-to-asset ratio of 0.83 outperforms 89.19% while its debt-to-equity ratio of 0.12 outperforms 60.56% of global online media companies.

Spectrum Brands

Romick purchased 408,366 shares of Spectrum Brands, giving the position 0.25% equity portfolio weight. Shares averaged $52.25 during the quarter.


The Middleton, Wisconsin-based company supplies consumer batteries, residential lock sets, residential builders' hardware, plumbing and shaving products. GuruFocus lists some positive investing signs for Spectrum Brands, including profit margins that have increased approximately 0.30% per year over the past five years and are outperforming 67.11% of global competitors. Despite this, revenues have declined approximately 17.20% per year on average over the past three years, a rate that underperforms 89.71% of global consumer packaged goods companies.


Disclosure: No positions.

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This article first appeared on GuruFocus.