David Abrams Sells 2 Holdings, Drills Into Kinder Morgan in 2nd Quarter

David Abrams (Trades, Portfolio), founder of Abrams Capital Management, disclosed this week that he sold out of Suburban Propane Partners LP (NYSE:SPH), boosted his position in Kinder Morgan Inc. (NYSE:KMI) and eliminated over 90% of his stake in Pacific Drilling SA (NYSE:PACD) during the second quarter.

Managing a portfolio of 22 stocks, the pupil of Baupost Group manager Seth Klarman (Trades, Portfolio) seeks companies in which the CEO has a significant stake or where the CEO's salary is primarily stock-based. Abrams employs a value approach to investing.

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Suburban Propane Partners

Abrams sold 2,667,512 shares of Suburban Propane Partners, reducing the equity portfolio by 1.48%. Shares averaged $14.32 during the second quarter.

The Whippany, New Jersey-based company distributes propane, fuel oil and other refined fuels to customers on the East Coast and West Coast. GuruFocus ranks the company's financial strength 3 out of 10 on several warning signs, which include a low Altman Z-score of 1 and an interest coverage ratio that underperforms 84.77% of global competitors.

Kinder Morgan

Abrams purchased 2,669,942 shares of Kinder Morgan, increasing the position 27.23% and the equity portfolio 1.31%. Shares averaged $15.19 during the second quarter.

GuruFocus ranks the Houston-based midstream energy company's profitability 6 out of 10: Even though the three-year decline rate of 0.10% underperforms 65.87% of global competitors, Kinder Morgan has a high Piotroski F-score of 7 and an operating margin that outperforms 87.31% of global energy companies.

Gurus with large holdings in Kinder Morgan include First Pacific Advisors (Trades, Portfolio) and Steven Romick (Trades, Portfolio).

Pacific Drilling

Abrams sold 7,008,461 shares of Pacific Drilling, dumping 94.52% of the stake. Shares averaged 52 cents during the second quarter, down significantly from the fourth-quarter 2018 average price of $1,331.62.

GuruFocus ranks the Luxembourg-based energy company's financial strength 2 out of 10 on several warning signs, which include a low Piotroski F-score of 2 and a debt-to-equity ratio that underperforms 74.29% of global competitors.

See also

Abrams also disclosed the removal of his holding in Allergan following the Irish drug manufacturer's merger with AbbVie Inc. (NYSE:ABBV), which closed on May 8. The equity portfolio impact is -8.63%.

Disclosure: No positions.

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