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Microsoft Corporation (MSFT), CVS Caremark Corporation (CVS): Robert Rodriguez, Steven Romick and First Pacific Advisors’s Top Picks

Los Angeles-based First Pacific Advisors is a hedge fund founded and managed by Robert Rodriguez and Steven Romick.
At Insider Monkey, we’ve found that the best picks of the best hedge funds can beat the market if you know where to look (Learn more about our strategy here.) In case you’re interested in how to be a hedge fund manager, there’s always that possibility as well.
The largest stake in the 13F portfolio of FPA is $423.8 million in Aon PLC (NYSE:AON). The hedge fund disclosed ownership of almost 6.9 million shares, down by 134,500 shares over the quarter. Overall, in addition to First Pacific, over 30 other hedge funds held shares in Aon PLC (NYSE:AON) at the end of March.
Next on our list is CVS Caremark Corporation (NYSE:CVS), represented in FPA’s 13F by a $402.8 million stake, which contains 7.3 million shares, up by 103,100 shares since the end of 2012. The stock of CVS Caremark Corporation (NYSE:CVS) returned over 27.4% since the beginning of the year and sports a P/E of 19.1x.
The third-largest position involves 13 million shares of Microsoft Corporation (NASDAQ:MSFT), the value of the stake amounting to $370.8 million. During the first three months of 2013, the Microsoft Corporation (NASDAQ:MSFT) position in FPA’s equity portfolio rose by 536,200 shares.
In Covidien plc (NYSE:COV), Robert Rodriguez and Steven Romick’s hedge fund disclosed ownership of 5.3 million shares, worth $362.9 million. The stock of Covidien plc (NYSE:COV) has a year-to-date return of slightly above 5% and has a P/E of almost 16. In the first quarter of 2013, more than 30 hedge funds reported stakes in Covidien plc (NYSE:COV).

In fifth is Thermo Fisher Scientific Inc. (NYSE:TMO), represented in the equity portfolio of First Pacific Advisors by a $295.7 million stake, which contains 3.9 million shares, up by 145,200 shares since the end of 2012.

To sum up, First Pacific Advisors has a large and valuable equity portfolio, which contains 124 positions, including options, and is worth $9.2 billion. According to the fund itself, “FPA focuses on five investment strategies: absolute fixed income, contrarian value, international value, small/mid-cap quality, and small/mid-cap absolute value. Under each of these strategies are mutual funds and separately managed accounts. Contrarian Value strategy also has private funds which are available to accredited investors and qualified purchasers.”

Aside from First Pacific, check out Philippe Laffont’s Coatue Management, Jeffrey Altman’s Owl Creek Asset Management, and Philippe Jabre’s Jabre Capital Partners for more coverage of hedgies’ top picks.

Disclosure: none

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