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New Guru David Abrams' 2 New Stocks and 1 Increase

June 11, 2014 | About:
Holly LaFon

Holly LaFon

250 followers
David Abrams (Trades, Portfolio) of Boston-based Abrams Capital Management is a new guru. He formerly held a position at Seth Klarman (Trades, Portfolio)’s Baupost Group, and since founding his own fund in 1998, has returned about an annualized 15% for his clients. Abrams is a classic value investor who worked in merger arbitrage before his hedge fund days.

With a value of $1.26 billion, Abrams’ long portfolio holds just 13 stocks. Two positions were new in the first quarter: Microsoft Corp (MSFT) and Barnes & Noble (BKS).

Microsoft (MSFT)

Abrams purchased 3,420,000 shares of Microsoft in the first quarter, amounting to 11.1% of his portfolio. This makes it the third-largest position in his holdings, behind Western Union (WU) (22.5%) and AIG (AIG) (18.8%).

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Microsoft’s share price averaged $38 in the first quarter, and has moved up 9% since.

Microsoft Corp was founded in 1975. It was incorporated in the State of Washington. Microsoft Corp has a market cap of $337.19 billion; its shares were traded at around $40.82 with a P/E ratio of 15.40 and P/S ratio of 4.10. The dividend yield of Microsoft Corp stocks is 2.60%. Microsoft Corp had an annual average earnings growth of 14.80% over the past 10 years. GuruFocus rated Microsoft Corp the business predictability rank of 3.5-star.

Barnes & Noble (BKS)

Abrams added 2,115,229 shares of Barnes and Noble in the first quarter, equal to 3.54% of the company’s shares outstanding and making the company 3.5% of his portfolio.

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Barnes and Noble had a share price average of $17 per share in the first quarter, and has increased by 14% since.

Barnes & Noble Inc. was incorporated in Delaware in 1986. Barnes & Noble Inc. has a market cap of $1.2 billion; its shares were traded at around $20.06 with and P/S ratio of 0.20.

Increase – J.C. Penney (JCP)

Abrams increased his slight position in J.C. Penney by 50% in the first quarter, adding 500,000 shares at an average price of $7 to his stake started the previous quarter of 1 million shares purchased at an average price of $8. This holding represents 1% of his portfolio after the increase. The price has since moved up to around $8.68 on Wednesday.

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J. C. Penney Company Inc. was incorporated in Delaware in 2002. J.C. Penney Co. Inc. has a market cap of $2.65 billion; its shares were traded at around $8.69 with a P/S ratio of 0.20.

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


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