Famously patient and conservative investor Steven Romick (Trades, Portfolio) of the FPA Crescent Fund bought 12 new stocks in the second quarter after staying out of the game in the first. Central bank policies and few companies trading at low multiples, among other factors, nudged him to the sidelines in the first three months of the year.
In his first-quarter letter, Romick told investors:
"Suffice to say we aren't seeing much in the way of fat pitches today, so we are comfortable just letting someone else swing at the junk that whizzes past us. We can, however, speak to what we think we do well - patiently wait for opportunity to invest in good assets at reasonable prices. This doesn't mean we're napping in the dugout. We have selectively entered the game, recently taking advantage of our broad mandate, as illustrated by the initiation of a handful of new positions, largely in emerging markets and commodity sensitive businesses. We will communicate more about these when we are no longer active in the market."
Apparently he found more to like in the way of U.S. and global equities recently. His 12 new stocks bring his total long positions to 61, giving his portfolio to 13% turnover with a total value of $9.8 billion.
Romick is also 28.2% weighted in the technology sector, 18.2% weighted in financial services and 13.9% weighted in health care.
As he reported this week, his top new positions for this quarter are: Alcoa Inc. (AA), Meggitt PLC (MGGT.L), Joy Global Inc. (JOY), Jardine Strategic Holdings Ltd. (J37.SI) and OAO Gazprom (OGZD.IL).
Alcoa Inc. (AA)
Romick bought 19,175,000 shares of Alcoa Inc. in the second quarter, when the price averaged $14. The position represents 2.9% of his portfolio.
Alcoa Inc. is a Pennsylvania corporation and was formed in 1888. Alcoa Inc. has a market cap of $18.72 billion; its shares were traded at around $15.97 with and P/S ratio of 1.0. The dividend yield of Alcoa Inc. stocks is 0.80%.
Meggitt PLC (MGGT.L)
Romick bought 20,949,800 shares of Meggitt PLC (MGGT.L), which had an average price of 5 pounds. The position represents 1.8% of his portfolio.
Meggitt PLC designs and manufactures high technology products and systems for the aerospace, defense and other specialist markets, including energy, medical, industrial, test and transportation. Meggitt PLC has a market cap of $3.99 billion; its shares were traded at around $4.94 with a P/E ratio of 17.40 and P/S ratio of 2.44. The dividend yield of Meggitt PLC stocks is 2.57%. Meggitt PLC had an annual average earnings growth of 9.20% over the past 10 years. GuruFocus rated Meggitt PLC the business predictability rank of 4-star.
Joy Global Inc. (JOY)
Romick purchased 2,730,300 shares of Joy Global, which had an average price of $60. The holding reflects 1.7% of his portfolio.