Steven Romick Increases Positions, Russian Oil Companies in Q3

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Oct 11, 2014
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Manager of FPA Capital’s Crescent Fund Steven Romick (Trades, Portfolio) is skeptical of today’s market, as he explained in his shareholder letter and demonstrated in refusing to buy new stocks in the third quarter.

“Investing today feels a bit like dancing the limbo, i.e. how low can you go? With interest rates, volatility, and short interest all near lows, it’s no surprise that opportunities are scarce…” he wrote.

“If you were to then surmise that there isn’t much trading at low valuations, you would be correct. With many stocks hitting new highs, the number of stocks trading at lower Price/Earnings (P/E) ratios is near its low. We continue to trust that long-term thinking will pay dividends in the form of good returns and allow us to avoid the frequent mistakes more commonly associated with the need for more immediate gratification.”

Romick instead deepened investments in stocks he already owned. At third quarter-end, Romick held 62 stocks in his portfolio, which has a $9.5 billion value. Technology as his top sector represents 27.7% of it.

His largest new adds during the third quarter were to: Bank of America (BAC, Financial), OAO Gazprom (LSE:OGZD, Financial), TE Connectivity Ltd. (TEL, Financial), OAO Lukoil (LSE:LKOD, Financial) and Surgutneftegas OJSC (MIC:SNGSP, Financial).

Bank of America (BAC, Financial)

Romick increased his position in Bank of America by 35.1% to 9,845,400 shares, from 3,801,200 shares. The stock’s share price averaged $27 in the third quarter.

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Bank of America Corporation, through its banking and various non-banking subsidiaries throughout the United States and in selected international markets provides a diversified range of banking and non-banking financial services and products through five business segments: Deposits, Card Services, Consumer Real Estate Services, Global Commercial Banking, Global Banking & Markets, Global Wealth & Investment Management. Bank Of America Corporation has a market cap of $173.3 billion; its shares were traded at around $16.48 with a P/E ratio of 26.60 and P/S ratio of 2.08. The dividend yield of Bank Of America Corporation stocks is 0.49%. Bank Of America Corporation had an annual average earnings growth of 16.50% over the past five years.

OAO Gazprom (LSE:OGZD, Financial)

Romick increased his position in OAO Gazprom by 91.9% in the quarter to 12,473,700, from 6.5 million shares. The stock’s price averaged $8 in the quarter.

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OAO Gazprom is engaged in oil production, refining activities, electric and heat energy generation. OAO Gazprom has a market cap of $76.51 billion; its shares were traded at around $6.66 with a P/E ratio of 3.10 and P/S ratio of 0.56. The dividend yield of OAO Gazprom stocks is 3.33%. OAO Gazprom had an annual average earnings growth of 11.90% over the past five years.

TE Connectivity Ltd. (TEL, Financial)

Romick increased his holding of TE Connectivity 67.3% to 2,925,000 shares, from 1,748,800 shares. The stock’s price averaged $62 for the quarter.

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TE Connectivity Ltd. 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 $21.1 billion; its shares were traded at around $51.55 with a P/E ratio of 14.30 and P/S ratio of 1.57. The dividend yield of TE Connectivity Ltd. stocks is 2.10%.

OAO Lukoil (LSE:LKOD, Financial)

Romick increased his holding of OAO Lukoil 45.5% in the quarter to 1,288,000 shares, from 885,000 shares. The stock’s price averaged $57 in the quarter.

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OAO Lukoil is engaged in the exploration, production, refining, marketing and distribution of crude oil and petroleum products. OAO Lukoil has a market cap of $36.04 billion; its shares were traded at around $47.75 with a P/E ratio of 5.30 and P/S ratio of 0.26. The dividend yield of OAO Lukoil stocks is 2.46%. OAO Lukoil had an annual average earnings growth of 8.20% over the past five years.

Surgutneftegas OJSC (MIC:SNGSP, Financial)

Romick increased his holding of Surgutneftegas OJSC 35.1% to 37,935,000 shares, from 28,086,000. The stock’s third quarter share price averaged $27.

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Surgutneftegas OJSC is engaged in oil and gas production and exploration with a P/E ratio of 3.80 and P/S ratio of 1.0. The dividend yield of Surgutneftegas OJSC stocks is 8.06%.

For more stocks of Steven Romick (Trades, Portfolio), visit his portfolio here. Not a Premium Member of GuruFocus? Try it free for 7 days here.