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Abrams Capital Management and David Abrams' Top First Quarter Holdings

June 12, 2014 | About:
Monica Wolfe

Monica Wolfe

130 followers
GuruFocus added another new guru this week. This guru is David Abrams (Trades, Portfolio), the founder and managing partner at Abrams Capital Management which is an employee-owned hedge fund. The fund typically invests in public equity markets in the U.S. This fund, run by David Abrams (Trades, Portfolio), is one of the largest hedge funds in Boston and utilizes a value investing approach.

David Abrams (Trades, Portfolio) holds a concentrated portfolio of thirteen stocks as of the close of the first quarter. The guru added two stocks to his holdings over the quarter, and the portfolio is currently valued $1.264 billion. The following five stocks represent Abrams’ top five positions as of the close of the first quarter.

Western Union (WU)

The guru’s largest holding is in Western Union where he holds on to 17,362,477 shares of the company’s stock. This position makes up for 22.5% of his total portfolio as well as 3.15% of the company’s shares outstanding.

The guru did not alter his holdings over the duration of the past quarter. Abrams hasn’t changed his position in Western Union since the second quarter of 2013, and since then the price per share has increased approximately 3.2%.

Abrams’ historical holding history:

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Western Union is engaged in global money transfer and payment services, providing people with fast, reliable and convenient ways to send money around the world.

Western Union’s historical revenue and net income:

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The Peter Lynch Chart suggests that the company is currently undervalued:

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Western Union has a market cap of $8.81 billion. Its shares are currently trading at around $16.35 with a P/E ratio of 11.40, a P/S ratio of 1.60 and a P/B ratio of 1.70. The company had an annual average earnings growth of 5.50%.

American International Group (AIG)

David Abrams (Trades, Portfolio)’ second largest holding is in American International Group where he holds on to 4,745,040 shares of the organization’s stock. This position represents 18.8% of his entire portfolio as well as 0.32% of the company’s shares outstanding.

The guru has not altered his position in the company since he bought into it in the second quarter of 2013. Since this buy the price per share has increased approximately 27.7%.

Abrams’ historical holding history:

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American International Group is a holding company which, through its subsidiaries, is engaged in a range of insurance and insurance-related activities in the United States and abroad.

AIG’s historical revenue and net income:

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The analysis on AIG reports that the company’s dividend yield is near a 10-year low, its revenue has been in decline over the past five years and its P/S ratio is nearing a 5-year high.

The Peter Lynch Chart suggests that the company is currently undervalued:

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American International Group has a market cap of $79.25 billion. Its shares are currently trading at around $54.78 with a P/E ratio of 9.60, a P/S ratio of 1.20 and a P/B ratio of 0.80.

Microsoft Corp (MSFT)

The guru’s third largest holding is in Microsoft where he maintains 3,420,000 shares of the company’s stock. This position makes up for 11.1% of his total assets managed and 0.04% of the company’s shares outstanding.

Over the duration of the first quarter Abrams made his first buy into Microsoft. The guru bought 3,420,000 shares in the first quarter price range of $34.98 to $40.99, with an estimated average quarterly price of $37.54 per share. Since then the price per share is up about 8.8%.

Abrams’ historical holding history:

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Microsoft develops, manufactures, licenses and supports a wide range of software products and services for many different types of computing devices.

Microsoft’s historical revenue and earnings growth:

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The analysis on Microsoft reports that the company’s price is near a 10-year high, its gross and operating margins have been in a 5-year decline and its interest coverage is comfortable, meaning they have enough cash to cover all debt. The company has also shown predictable revenue and earnings growth.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Microsoft has a market cap of $337.52 billion. Its shares are currently trading at around $40.86 with a P/E ratio of 15.40, a P/S ratio of 4.13 and a P/B ratio of 3.90. The company had an annual average earnings growth of 14.80% over the past ten years.

GuruFocus rated Microsoft the business predictability rank of 3.5-star.

Wells Fargo (WFC)

David Abrams (Trades, Portfolio)’ fourth largest holding is in Wells Fargo. The guru holds on to 2,770,000 shares of the company’s stock, representing 10.9% of his total portfolio as well as 0.05% of the company’s shares outstanding.

During the past quarter, Abrams did not alter his position in Wells Fargo. The last move he made in the company was in the fourth quarter of 2013, and since then the price per share is up 21%.

Adams’ holding history as of the close of the first quarter:

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Wells Fargo is a financial services companies, providing a range of retail banking and brokerage, asset and wealth management and corporate and investment banking products and services to customers.

Wells Fargo’s historical revenue and net income:

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The analysis on Wells Fargo reports that the company’s operating margin is expanding, its dividend yield is close to a 3-year high, its price is near a 10-year high and its revenue has been in decline over the past three years.

The Peter Lynch Chart suggests that the company is currently undervalued:

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Wells Fargo has a market cap of $275.15 billion. Its shares were traded at around $52.24 with a P/E ratio of 12.80, a P/S ratio of 3.38 and a P/B ratio of 1.70. The company offers a dividend yield of 2.39%. Wells Fargo had an annual average earnings growth of 4.60% over the past ten years.

CST Brands (CST)

David Abrams (Trades, Portfolio)’ fifth largest holding is in CST Brands. The guru holds on to 3,000,000 shares of the company’s stock, representing 7.4% of his total portfolio as well as 3.97% of the company’s shares outstanding.

During the past quarter, Abrams did not alter his position in CST Brands. The last move he made in the company was in the third quarter of 2013, and since then the price per share is up 8.9%.

Adams’ holding history as of the close of the first quarter:

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CST Brands Inc is a retailer of transportation fuels and convenience goods in North America. In the United States, each of Company's Corner stores sells Valero fuels. The Company also offers snack foods, tobacco products, beverages and fresh foods.

CST Brands’ historical revenue and net income:

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The analysis on CST Brands reports that the company’s revenue per share has been in decline over the past year.

The Peter Lynch Chart suggests that the company is currently overvalued:

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CST Brands has a market cap of $2.61 billion. Its shares are currently trading at around $34.56 with a P/E ratio of 20.10, a P/S ratio of 0.21 and a P/B ratio of 4.30.

Check out our new guru David Abrams’ full portfolio here.

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Rating: 5.0/5 (3 votes)

Voters:

Comments

yana987
Yana987 premium member - 4 months ago

he's good dunno about his current holdings though..

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