Robert L. Rodriguez - FPA Capital Q4-2011 Fund Investing Strategies By Dividend Yield – Stock Capital, Investment. Here is a current portfolio update of Robert L. Rodriguez - FPA Capital - portfolio movements as of Q4/2011 (December 31, 2011). In total, he has 25 stocks with a total portfolio worth of USD 863,604,000.
Strategy:
Since 1984, the Fund has been managed by Robert L. Rodriguez, Director, President, and Chief Investment Officer. Two additional portfolio managers, Dennis M. Bryan and Rikard B. Ekstrand, also assist in portfolio management. Analytical support is provided by Pavan Nagpal and Steven Romick.
This price-driven equity style attempts to exploit market inefficiencies among stocks of smaller companies. Intense research is required to build the high level of knowledge and confidence necessary to realistically evaluate unpopular situations. Great attention is paid to the minimization of potential risk. The disciplined selection process is designed to minimize business risk by applying specific fundamental criteria: strong balance sheets, free cashflow, an understandable and successful business strategy under capable management, and unique business characteristics, which may include proprietary technology or a dominant market position. Qualifying companies have a history of generating high return on equity or demonstrate the potential to do so. FPA's value bias focuses on companies with long-term records; over 70% of holdings have at least 10-year histories.
Research concentrates on economic and market sectors either heavily discounted or simply ignored and involves basic computer screens for balance sheet and return data, the study of industry periodicals and research reports from select Wall Street sources, and in-depth interviews with company principals. Valuation considerations are applied to this list of potential investments, seeking to minimize market risk during the process of accumulation. New purchases are concentrated in companies with relatively low Price/Normalized Earnings, low Price/Pretax Cashflow, low Price/Book Value, low Price/Replacement Value and low Market Cap/Total Revenues. A contrarian outlook allows ownership of companies at prices already reflecting a negative perception by the marketplace. FPA believes this to be a relatively low-risk approach to the smaller cap markets given a reasonable time horizon.
Positions are reduced or eliminated when the basis for investment has been revised, the stock is selling at a significant premium P/E to the market, profitability recovery has been attained, a management disappointment without expectation of recovery has occurred, or a superior alternative value has presented itself.
The fund is generally concentrated, with 25-45 equity holdings and a maximum of 25% in an industry. Convertible securities may occasionally be held as an equity alternative. Historically, the fund has remained substantially invested; however, reserves may increase when opportunities for investment and superior values are lacking. A long-term investment horizon of 3 to 5 years and the patience and perseverance required to hold out-of-favor issues produce low portfolio turnover, with the addition of a limited number of new positions during any given year.
Robert L. Rodriguez’s fund positions as of Q4/2011 with actual share movements:
Sym - Stock | Portfolio Weight | Recent activity | Reported Price* |
ESV - ENSCO PLC | 10.33 | 0 | $46.92 |
ARW - Arrow Electronics | 9.67 | 0 | $37.41 |
RDC - Rowan Cos. | 9.25 | 0 | $30.33 |
AVT - Avnet Inc. | 8.84 | 0 | $31.09 |
TRN - Trinity Industries | 7.84 | 0 | $30.06 |
ROSE - Rosetta Resources Inc. | 7.81 | Reduce 9.40% | $43.50 |
WDC - Western Digital | 7.23 | Add 4.85% | $30.95 |
FL - Foot Locker Inc. | 5.01 | Reduce 14.50% | $23.84 |
SIG - Signet Jewelers Ltd. | 4.35 | 0 | $43.96 |
AGP - AMERIGROUP Corp. | 3.4 | Add 12.12% | $59.08 |
OSK - Oshkosh Corp. | 3.14 | Add 1.76% | $21.38 |
ATW - Atwood Oceanics Inc. | 2.9 | Reduce 10.01% | $39.79 |
SM - St. Mary Land & Explor | 2.89 | Reduce 5.00% | $73.10 |
NFX - Newfield Exploration | 2.82 | Add 1.90% | $37.73 |
BHI - Baker Hughes | 2.41 | 0 | $48.64 |
IDCC - InterDigital Inc. | 1.85 | Add 303.11% | $43.57 |
PTEN - Patterson UTI-Energy | 1.7 | Reduce 37.33% | $19.98 |
XEC - Cimarex Energy Co. | 1.65 | 0 | $61.90 |
RS - Reliance Steel & Aluminum | 1.55 | 0 | $48.69 |
HP - Helmerich & Payne | 1.21 | Buy | $58.36 |
FII - Federated Investors Inc. | 1.19 | 0 | $15.15 |
VECO - Veeco Instruments | 1.12 | Add 105.98% | $20.80 |
COG - Cabot Oil & Gas | 0.83 | 0 | $75.90 |
ARRS - Arris Group Inc. | 0.76 | 0 | $10.82 |
DV - DeVRY Inc. | 0.24 | Buy | $38.45 |
ESV, ARW, RDC, AVT, TRN, ROSE, WDC, FL, SIG, AGP, OSK, ATW, SM, NFX, BHI, IDCC, PTEN, XEC, RS, HP, FII, VECO, COG, ARRS, DV
