Steven Romick is the portfolio manager of First Pacific Advisors Crescent Fund. The fund’s investment objective and strategy reports that they “seek to generate equity-like returns over the long-term, take less risk than the market and avoid permanent impairment of capital.”
Over the second quarter Romick purchased 12 new stocks and sold out of two. The guru’s portfolio currently holds 61 stocks valued at over $9.81 billion. The following five companies represent Romick’s top five stock holdings as of the close of the first quarter.
Microsoft (MSFT)
Romick’s largest position this quarter is in Microsoft. The guru holds on to 14,980,000 shares of the company’s stock, representing 6.4% of his total portfolio and 0.18% of the company’s shares outstanding.
The guru did not alter his position in Microsoft over the past quarter. The last move he made in the company was in the first quarter of 2014 when he made a slight decrease. Since then the price per share is trading up about 10.8%.
Steven Romick’s holding history as of the second quarter:
Microsoft generates revenue by developing, manufacturing, licensing and supporting a wide range of software products and services for many different types of computing devices.
Microsoft’s historical revenue and net income:
The analysis on Microsoft reports that the price is near a 10-year high, its interest coverage is comfortable and it has shown predictable revenue and earnings growth.
The Peter Lynch Chart suggests that the company is currently undervalued:
Microsoft has a market cap of $346.15 billion. Its shares are currently trading at around $41.91 with a P/E ratio of 15.60, a P/S ratio of 4.20 and a P/B ratio of 4.00. The company had an annual average earnings growth of 14.80% over the past ten years.
GuruFocus rated Microsoft the business predictability rank of 3-star.
Oracle Corporation (ORCL)
Romick’s second largest holding is in Oracle Corporation. The guru holds on to 14,251,000 shares of the company’s stock, representing 5.9% of his total portfolio and 0.31% of the company’s shares outstanding.
The guru did not alter his holdings during the second quarter. His last move, in the first quarter of 2014, was an increase of nearly a million shares, and since then the price per share is trading up about 5.4%
Romick’s holding history as of the second quarter:
Oracle is a provider of enterprise software and a provider of computer hardware products and services. The company provides technologies of cloud computing, including database and middleware as well as web-based applications.
Oracle’s historical revenue and net income:
The analysis on Oracle reports that the revenue has slowed down over the past year, the operating margin is expanding, their dividend yield is at a 5-year high and their price is near a 10-year high.
The Peter Lynch Chart suggests that the company is currently overvalued:
Oracle Corporation has a market cap of $178.13 billion. Its shares are currently trading at around $38.14 with a P/E ratio of 16.80, a P/S ratio of 4.80 and a P/B ratio of 3.90. The company had an annual average earnings growth of 18.00% over the past ten years.
GuruFocus rated Oracle the business predictability rank of 4.5-star.
Aon PLC (AON)
Romick’s third largest stock holding goes to Aon PLC where he holds 5,995,000 shares. His position in the company represents 5.5% of his total portfolio and 1.95% of the company’s shares outstanding.
Over the past quarter Romick did not change his holdings in the company. The guru last altered his stock holdings in the first quarter 2014 when he added to his holdings. From the second quarter, the price is up approximately 4.1%.
Romick’s historical holding history:
Aon provides risk management & human capital consulting services, delivering distinctive client value via risk management solutions, including insurance & reinsurance brokerage and workforce productivity solutions.
Aon’s historical revenue and net income:
The analysis on Aon reports that the price is near a 10-year high, its operating margin is expanding and its P/E, P/S and P/B ratios are all trading near historical highs. The company has also issued $2 billion of debt over the past three years, but its debt level has been deemed acceptable.
The Peter Lynch Chart suggests that the company is currently overvalued:
Aon PLC has a market cap of $26.71 billion. Its shares are currently trading at around $90.09 with a P/E ratio of 23.80, a P/S ratio of 2.40 and a P/B ratio of 3.40. The company had an annual average earnings growth of 19.90% over the past ten years.
GuruFocus rated Aon the business predictability rank of 3-star.
Romick’s fourth largest position is in CVS Caremark where the guru maintains a total of 6,805,000 shares of the company’s stock. His position makes up for 5.2% of his total portfolio and 0.55% of the company’s shares outstanding.
Steven Romick hasn’t altered his position in CVS since the fourth quarter of 2012. Since then the price per share has increased 63.5%.
Romick’s historical holding history of CVS:
CVS Caremark provides pharmacy healthcare services in the U.S. It has three reportable business segments: Pharmacy Services, Retail Pharmacy and Corporate.
CVS Caremark’s historical revenue and net income:
CVS's revenue growth has recently beaten the industry average of 2.5%. Since last year, the company’s revenues have increased by 1.7%. CVS improved its earnings per share by 21.3% in the most recent quarter compared to the same quarter last year.
The Peter Lynch Chart suggests that the company is currently overvalued:
CVS has a market cap of $89.91 billion. Its shares are currently trading at around $76.90 with a P/E ratio of 19.60, a P/S ratio of 0.70 and a P/B ratio of 2.40. The company had an annual average earnings growth of 12.70% over the past ten years.
GuruFocus rated CVS the business predictability rank of 4.5-star.
Covidien PLC (COV)
The guru’s fifth largest position is in Covidien where he holds on to 4,559,929 shares of the company’s stock, representing 4.2% of his total portfolio and 0.99% of the company’s shares outstanding.
Over the past quarter Romick cut his holdings -6.01% by selling a total of 291,771 shares. He sold these shares in the second quarter price range of $69.03 to $91.24, with an estimated average quarterly price of $74.56 per share. Since then the price per share is up 22.5%.
Romick’s historical holding history:
Covidien is engaged in the development, manufacture and sale of healthcare products for use in clinical and home settings. Its mission is to create and deliver innovative healthcare solutions, developed in ethical collaboration with medical professionals.
Covidien’s historical revenue and net income:
The analysis on Covidien reports that the company’s operating margin is expanding, its price is near a 10-year high and over the past three years the company has issued $1.7 billion of debt.
The Peter Lynch Chart suggests that the company is currently overvalued:
Covidien has a market cap of $41.2 billion. Its shares are currently trading at around $91.37 with a P/E ratio of 26.20 and a P/S ratio of 4.00. The dividend yield of Covidien stocks is 1.30% and the company had an annual average earnings growth of 6.60% over the past ten years.
Check out Steven Romick’s entire second quarter portfolio here.
